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Russia will likely scale back a planned further increase in the price of its natural gas delivered to Armenia, the Armenian national gas utility confirmed on Tuesday.

Under the terms of a supply contract signed by the ArmRosGazprom (ARG) operator with a subsidiary of Russia’s Gazprom monopoly, the price of Russian gas for Armenia rose from $110 to $154 per thousand cubic meters in April and was due to reach $200 a year later.

The Moscow daily “Kommersant” reported Tuesday that Gazprom is now ready to charge ARG only $180 per thousand cubic meters starting from April 2010 in view of last year’s drastic fall in international oil prices. The paper said it has already cut the cost of Russian gas to be supplied to Europe next year.

ARG spokeswoman Shushan Sardarian confirmed the information. “Intensive negotiations are underway with the Russian side over reducing that $200 fee,” Sardarian told RFE/RL. The parties have already reached a “tentative agreement” on the discount disclosed by “Kommersant,” she said.

Russian gas is the main sources of winter heating for Armenian households. It is also used by local thermal power plants for generating about one-third of Armenia’s electricity. The April surge in the gas price immediately pushed up the cost of basic utility services in the country.

Gazprom lost its monopoly on gas supplies to Armenia with the launch of a gas pipeline from neighboring Iran earlier this year. ARG, in which Gazprom holds a majority stake, began importing Iranian gas in May. The volume of those deliveries, modest at the moment, is expected to rise significantly in the coming years.
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