By Atom Markarian
Prime Minister Andranik Markarian ruled out on Thursday what would be a hugely unpopular increase in the price of electricity in Armenia this year, but left open such a possibility in 2004.
The assurances followed hints by other top government officials about an imminent rise in the energy tariffs that have remained unchanged for the past six years. Energy Minister Armen Movsisian argued last week that the government finds it increasingly hard to maintain their current level because Armenia imports the bulk of its energy resources and its national currency, the dram, is now worth about 20 percent less than it was in 1998.
Addressing the parliament, Markarian indicated that his cabinet, which sets utility prices through a special regulatory body, will have to raise the tariffs some time next year. But he assured lawmakers that the increase will not be substantial. “According to our calculations, that will not have a serious impact on the socially vulnerable strata of the population,” he said without elaborating.
The existing retail price of electricity, 25 drams (4 U.S. cents) per kilowatt/hour, is one of the highest in the former Soviet Union and reflects the resource-poor country’s heavy dependence on imports of natural gas and nuclear fuel. Many Armenians have always found it too high. With power remaining the main source of heating in Armenia, payment of electricity bills accounts for a disproportionately large share of modest family budgets in winter months.
Still, government sources say the Armenian authorities are facing growing pressure to resort to the unpopular measure from the owner of the country’s energy distribution network, the British-registered Midland Resources Holding. Also pushing for that, they say, is the new owner of Armenia’s largest thermal power plant, the Russian power monopoly RAO Unified Energy Systems.