Ankara is poised to offer a substantial discount on Russian gas during this week’s negotiations. About informs Bloomberg cites top Turkish officials.
We’re talking about a discount of at least 25% of the market price. Negotiations with the Russian delegation will be held in Ankara on Friday, December 9th.
According to the agency, if negotiations are successful and a gas cut is achieved, Turkey will be able to ease the pressure on the lira, which has exhibited one of the worst dynamics among world currencies in the past two years – a 70 percent drop. almost 40% in 2021 and 2022
In addition, Bloomberg writes that President Recep Tayyip Erdogan, thanks to the low fuel price from Russia, can prevent the increase in energy costs, which is very important for voters on the eve of the presidential elections in 2023. In addition, it may increase its popularity in contrast to the European energy crisis.
Agency sources do not name the exact parameters of the upcoming deal, but it is known that Turkey wants to achieve a retroactive reduction of at least 25 percent on all gas purchases in 2023, as well as some gas purchases in 2022.
If Ankara fails to provide an acceptable reduction in negotiations with the Russian side, Turkish authorities plan to agree with Moscow to delay payments until at least 2024.
Russian gas accounted for nearly half of the 59 billion cubic meters imported by Turkey in 2021. Erdogan said that in the face of the global energy crisis and the inflation of the Turkish lira, the country’s electricity expenditures in 2022 could reach $100 billion, double that of last year.
In October, Putin and Erdogan said a major gas hub could be set up in Turkey to redirect the flow of gas to Europe, which was previously reported.
The exact price of Russian gas supplied to non-CIS countries after the announcement of the sanctions by the West is unknown. After the terrorist attacks on Nord Stream 1 and Nord Stream 2 in September, the actual transit to Europe is only through Ukraine.
According to the analytical company INFOLine, the average price of Russian pipeline gas in countries outside the CIS in the first half of 2022 exceeded $ 730 per thousand cubic meters, and approached $ 800 in the EU.
According to the macro forecast of the Ministry of Economic Development, the average export price of Russian gas supplied to non-CIS countries will be $ 829 per thousand cubic meters in 2022.
Moscow supplies fuel to partner countries (China, India, Kazakhstan, Belarus and others) at a significant discount. For example, sales to Beijing via the Power of Siberia gas pipeline are fixed at fuel and kerosene prices with a nine-month delay; Gas prices change quarterly. According to a Gazprom report, in the second quarter of 2022 a cubic meter of gas was sold to the Chinese at $250. During this period, gas was trading for at least $1,000 per thousand cubic meters on European exchanges – so we can talk about a discount of at least 70 percent for Beijing.
The cost of Russian fuel for Belarus is even lower. According to a long-term contract signed between Minsk and Moscow at the end of last year, Gazprom supplies gas to the neighboring republic at $ 128.5 per cubic meter (the same cost for Belarus in 2021).
The exact price of Russian gas for India is unknown, but in July Reuters reported, citing sources, that New Delhi is getting fuel at a discount of at least 30 percent from Moscow.
On December 8, Reuters reported that Tashkent refused to enter into a so-called “triple alliance” on gas with Russia and Kazakhstan, citing Zhorabek Mirzamakhmudov, the Uzbek Energy Minister. According to the agency, Uzbekistan fears Western sanctions and will not accept political conditions that could grant it energy discounts. At the same time, Tashkent did not exclude that they would sign an agreement on the supply of Russian gas against the backdrop of electricity shortages. However, they noted that this would be a “technical contract”, not an alliance or alliance.
Subsequently, Dmitry Peskov, the press secretary of the Russian president, denied Tashkent’s refusal of a tripartite gas alliance with Moscow and Astana. The Kremlin stressed that such an alliance does not imply any political conditions.
Source: Gazeta
Ben Stock is a business analyst and writer for “Social Bites”. He offers insightful articles on the latest business news and developments, providing readers with a comprehensive understanding of the business world.