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‘Thousands’ Sign Opposition Suit Against Gas Price Hike


Armenia -- Thousands of opposition supporters demonstrate in Yerevan, 1 March 2010.

Armenia -- Thousands of opposition supporters demonstrate in Yerevan, 1 March 2010.

In what is shaping up as the biggest class-action lawsuit in Armenia’s history, thousands of people have joined the Armenian National Congress (HAK) in challenging a sharp rise in the price of natural gas in court, the opposition alliance said on Thursday.


The state Public Services Regulatory Commission (PRSC) last month allowed the ArmRosGazprom (ARG) national gas distributor to increase its gas tariff for households by 37.5 percent, to 132 drams (33 U.S. cents) per cubic meter, because of the increased cost of Russian gas imported to Armenia. The gas price for corporate consumers was raised by 17 percent. The new tariffs took effect on April 1.

ARG, 80 percent of which is owned by Russia’s Gazprom monopoly, said they should be set higher also because of a more than 25 percent depreciation of the Armenian currency, the dram, against the U.S. dollar over the past year. Critics counter that the dram had gained more than 80 percent in nominal value against the dollar in the years leading up to the 2009 economic crisis and that ARG failed to adjust its fees accordingly.

HAK leaders have been among the most vocal critics of the unpopular measure which they say is economically unjustified and unjust. Earlier this month they announced plans to take the PRSC to court, urging opposition supporters to sign up to the lawsuit en masse.

According to Vahe Hovsepian, an HAK lawyer, the lawsuit will be formally filed to Armenia’s Administrative Court by April 7. He said some 6,000 Armenians have already agreed to participate in the litigation.

Speaking to RFE/RL’s Armenian service, Hovsepian said the plaintiffs will tell the court that in approving the price hike, the regulatory body violated several provisions of an Armenian regulating the work of the PSRC. He singled out a clause that requires the body to “balance” the interests of consumers and utility companies.

“The principle of balancing the interests of consumers and regulated bodies was not taken into account at all,” he claimed. “The [ARG] company’s interests took precedence.”

Both the PSRC and the Armenian government are certain to reject these arguments. The government approved last week more than 10 percent increases in pensions and poverty benefits to mitigate the effects of the price hike on the most vulnerable groups of the population

The gas tariffs already rose by 14 percent in April 2009, resulting in a 20 percent increase in the retail prices of electricity sanctioned by the PSRC. The regulators said earlier this month that the electricity fees will remain unchanged at least until this August.

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