Russia To Introduce New Tariffs On Natural Gas For Turkey

Suffering from a wide range of economic sanctions imposed by Western countries, Russia is expected to introduce new tariffs on natural gas exports to Turkey through the Blue Stream pipeline in order to strengthen its economy, a development which may put an obstacle before the demand that Russia reduce its gas prices for Turkey.

A recent draft making some amendments to the taxation of several products was passed in Russia's State Duma (lower house of parliament) on Wednesday. The draft, should it pass in the Federation Council (upper house of parliament), will enforce tariffs on natural gas exported by Russia's state-owned gas company, Gazprom, to Turkey via the Blue Stream pipeline. Russia does not currently exercise any export duty on gas transported to Turkey via this pipeline.

Energy Minister Taner Yıldız paid a visit to Russia in early October of this year to request a discount on the price Turkey pays for Russian gas. Right after his visit, Gazprom announced that its gas flow to Turkey was set to reach a record high of 30 billion cubic meters (bcm) this year and that it intended to lower the price of the gas that Turkey purchases from Russia.

Considering the latest development, however, the negotiations between Turkey and Russia on a reduction in gas prices at the beginning of this month are likely to have no effect.

Turkey is expected to purchase 30 million bcm of natural gas from Russia in 2015, 10 million bcm of which is to be imported by private companies and the rest by the state-owned Turkish Pipeline Corporation (BOTAŞ).

Western countries have been imposing sanctions on Russian firms due to the country's annexation of Crimea in March of this year and its alleged role in separatist riots in Ukraine. The counterattack from Russia came this August as a ban on food imports from Western countries. By passing the new draft in parliament, Russia is planning to strengthen its economy, which has been greatly affected by the sanctions, with additional taxes.

The new draft includes a 5 percent hike in the special consumption tax and a hike of between 9 and 13 percent in the tobacco tax, as well as the new export tariff on the Russia-Turkey gas pipeline.

(Cihan/Today's Zaman)