Thread by @v_vuksanovic

THREAD on #Serbia and #Russia: President of #Serbia #aleksandarvučić is in #Sochi, #Russia to meet #Russia's President #VladimirPutin. The main talking point of the agenda, the price of Russian #gas for Serbia. #Serbia is entirely dependent on the import of Russian gas.

#Russia owns majority shares in NIS, Serbia's national oil and gas company, sold to Moscow below market price in 2008, in return for #Russia's protection in the #UN on #Kosovo and hoping that Moscow would construct now-defunct South Stream pipeline over Serbian territory.

The energy dependency was confirmed with the inauguration of the #TurkStream pipeline in 2021. In light of the ongoing energy crisis in Europe, the Serbian President fears the high gas prices for Serbia. The first reason is more immediate, the start of the heating season.

However, more is at stake. In April, #Serbia is about to undergo an electoral cycle, with presidential, parliamentary and city elections in the capital of #Belgrade. The win of the incumbent #President and his party, the Serbian Progressive Party (SNS), is almost certain.

However, they still face the challenge of the #COVID19 and the economy that must not experience major setbacks until they consolidate power. The pandemic has become a problem because of the low vaccination rollout that results in a high number of infected and deceased.

He needs to show that the economy is still growing despite the pandemic, partially explaining why public health is being sacrificed for the sake of economic growth and why loans from #China are appealing. The #UAE is also useful as a source of cash and domestic promotion.

However, the higher gas prices would be a disaster, as that mandates higher costs of heating, electricity and groceries for the Serbia citizens. All those things that voters observe during the electoral cycle. At this moment, Serbia pays Russia 270 USD per 1,000 cubic meters.

Since the Soviet days, Serbia bought Russian gas based on pricing derived from the oil formula (100%). Russia's state-owned energy corporation #Gazprom proposes that price is determined 30% by oil formula and 70% by spot market prices, leading to 790 USD per 1,000 cubic meters.

Serbian leadership states that this is too much for them. Even the alternative proposal that price is determined 70% by oil formula and 30% by spot market prices, leading to the price of 510 USD per 1,000 cubic meters, is deemed too much for the Serbian leadership.

Serbian President #Vucic hopes to secure a friendly price with a new 10-year deal for a minimum of three billion cubic metres annually. The current agreement is for five billion cubic metres. The amount of gas consumption in Serbia has doubled compared to previous years.

However, although #Vucic said that he will "beg" #Putin for a fair price, #Russia gives fair price either to big, reliable customers with long-term contracts like #Germany or to its allies in the post-Soviet space like #Belarus and #Armenia.

More importantly, while the Serbian side insists that the focus of the talks will be on the issue of gas supply, Russian Presidential Spokesman Dmitry Peskov stated that the two will discuss bilateral ties with the gas issue only being one of the covered areas. What gives?

While #Serbia did a slight re-pivot to #Russia due to the election of #JoeBiden in the #US, 2020 was a very bad year for relations between #Serbia and #Russia, and #Putin did not forget that. What happened in 2020?

#Russia and #Putin were displeased that #Serbia and its president #aleksandarvučić were trying to resolve the #Kosovo dispute with the help of #DonaldTrump. For Moscow, it meant losing one of the last remaining assets in the #Balkans and #Serbia pivoting towards the #US.

In July 2020, Serbia experienced violent anti-lockdown protests for which pro-government tabloids accused pro-Russian elements. A sign that Serbia was willing to scapegoat Russia to court the West. In September, Serbia also cancelled military drills with #Russia and #Belarus.

#Putin did not forget how #Vucic tried to trick him when he thought he would get a better bargain from the West. #Putin will use this meeting to discipline him and to ask something in return. That something will almost certainly not be cheap, and we won't find out what that is...

...until it is too late. One thing is for certain if he does secure the real from #Putin irrespective of the price he will have to pay, #Vucic will boast to his electoral base that this is the product of his sacrifice and #Putin's benevolent friendship.