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Government Says Utility Price Hikes Unlikely In 2010


Armenia -- Energy Minister Armen Movsisian talks to journalists on October 16, 2009.

Armenia -- Energy Minister Armen Movsisian talks to journalists on October 16, 2009.

The Armenian government will likely prevent a further surge in the basic utility prices next year despite the increased cost of natural gas imported from Russia, Energy Minister Armen Movsisian said on Tuesday.


Under an agreement with Russia’s Gazprom monopoly, Armenia will pay $180 per thousand cubic meters of Russian gas starting from April 2010. The gas price already rose from $110 to $154 per thousand cubic meters last April, leading the ArmRosGazprom (ARG) national gas distribution company to raise its tariff for individual consumers by 14 percent.

The price hike also resulted in a 20 percent increase in the retail price of electricity supplied to households. Natural gas is used for generating roughly one third of Armenia’s electricity output.

“The Russian side has already declared the [new] gas price, and calculations and studies are underway right now to see what influence that will have on the entire energy system, including the electricity tariff,” Movsisian told a news conference.

“Of course, we will do everything to keep up the existing tariff,” he said. “That is, not to allow a rise in the electricity price. To what extent we will succeed in that is still too early to say. I think we will find ways of doing that.”

The agreement with Gazprom allowed the Russian giant to charge Armenia $200 per thousand cubic meters in 2010. However, Gazprom announced in October that it will scale back the increase because of a sharp fall in international oil prices.

Movsisian dismissed Russian press speculation that the discount is a reward for the Yerevan government’s decision to select Russian technology and contractors for the construction of a new nuclear plant in Armenia. He said the government did so only because Russian nuclear reactors are “the best in the world.”

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