Turkey demands for greater gas discount

Negotiations to reduce the price of Russian gas for Turkey, the success of which was loudly announced in early February, have still deadlocked. Gazprom and Turkish Botas can’t decide to which components of the formula a discount of 10.25% should be applied. These disputes question implementation of more large-scale political agreements between Moscow and Ankara on construction of Turkish Stream - Turkey delays permits for its beginning. According to experts, Ankara uses the factor of the gas pipeline to alleviate the plight of local importers, which suffer from weakening of the lira.

The negotiations between Gazprom and the Turkish state-owned company Botas to reduce the prices of Russian gas are in jeopardy, the local newspaper Hurriyet wrote yesterday. Sources of the Kommersant on the Turkish market confirmed that the talks had reached a deadlock. In early February, the Turkish Energy Minister Taner Yildiz said that the parties agreed to reduce the price of gas for Botas by 10.25%, but a half months after the companies still haven’t signed a supplementary agreement to the contract. According to the Kommersant’s information, the parties have different opinions on which component of the formula the discount should be applied: Gazprom wants to apply it to the contract price, and Botas - to the basic one. The latter option is more profitable for Botas, although now, according to the Kommersant’s calculations, the difference between these two methods of calculation is only a few dollars per thousand cubic meters, but with the increase in the oil price the effect will be more noticeable.