Economics

PRESIDENT SAYS THAT BY 4Q2020, GAS PRICE FOR MOLDOVA WILL DROP TO US$100 PER A THOUSAND CUBIC METERS

03 april, 2020

By the 4th quarter of the current year, the natural gas price for Moldova will be lowered from US$180 to US$100 per a thousand cubic meters, President Igor Dodon stated during his traditional weekly live Q&A communication with citizens on his YouTube channel.

Answering to the Banking & Finance magazine’s question, Igor Dodon said that the current gas price trend is steadily going down.

“Presently, we have been in negotiations with the Russian Gazprom Concern. Look, in the beginning of this year, natural gas was imported for US$176 per a thousand cubic meters. On April 1, the price dropped by US$10-15. On July 1, the price will diminish to approximately US$135”, said Dodon.

In his words, the current contract concluded with Gazprom is advantageous for Moldova. With world oil prices falling, the gas price goes down as well, so the Government can reduce tariffs for households and economic entities in the country.

Asked why Bulgaria is buying gas from Gazprom for US$149 per a thousand cubic meters, while Moldova – for US$176, Igor Dodon explained that Bulgaria is importing according to the current gas price, whereas the contract between Moldova and Gazprom determines the price for previous 9 months.

“This upcoming summer, we will hold negotiations on the republic’s possible switching to purchasing natural gas for the current prices of international markets”, said Igor Dodon.

Asked about the much-spoken Russian credit of US$200 million, President Dodon replied that despite the current hard times, Russia “shall provide this credit to Moldova. It has been already included into the 2020 Federal Budget”.

“I talked recently with Dmitry Kozak [Russian Deputy Prime Minister, who is President Vladimir Putin’s Special Representative for the development of trade and economic relations with the Republic of Moldova] and he said that Russia always keeps its word, and that the promised credit shall come all right”, Dodon said, adding that according to the credit agreement, Moldova is free to use this money at its own discretion.
Dodon called other countries, too, to help Moldova “in this hard time. Help us without putting forth any special conditions and we will be grateful to you for this”. The President referred to the example of Russia, Chisinau and Switzerland, actively helping Moldova.

Answering the Banking & Finance magazine’s question about the national leu currency depreciation, which is fraught with a growth of foodstuff prices, the President admitted that in the current hard time the leu’s exchange rate may go down but not greatly.

“Since the beginning of 2020, the leu has depreciated against the U.S. dollar by 4-5%, whereas the currencies of other countries, where Moldova exports to, have depreciated to a much greater extent, for instance the Russian ruble – by 17%, “which is creating difficulties to Moldovan exporters”.

Igor Dodon reminded once again that the National Bank of Moldova (NBM) has quite enough means in its hard-currency reserve for underpinning the Moldovan leu’s exchange rate.

He disagreed with assertions that Moldovan exports have sharply shrunk lately, and said that the exports to the former Soviet countries alone account for 40-50 million lei per day.

The President admitted that, really, Moldovan overall exports to European Union countries have diminished, and this pitiful circumstance has been largely due to the Moldovan Free Economic Zones, where a large-scale production of cables and the like items for automobile industry has been organized, but due to the coronavirus pandemic quarantine, these exporters are now working at only 7-10% their strength.

President Igor Dodon categorically ruled out the issuing, by the NBM, of additional money mass not covered with goods, “which may lead to nothing but inflation and a price growth”.

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