The price of Russian natural gas supplied to Armenia will rise further in the coming years, Energy and Natural Resources Minister Armen Movsisian confirmed on Wednesday.
Under an agreement with Russia’s Gazprom monopoly, the ArmRosGazprom national gas operator started paying $180 per thousand cubic meters of Russian gas starting from April 1. The gas price already rose from $110 to $154 per thousand cubic meters in April 2009.
A top Gazprom executive visiting Armenia was reported to say on Tuesday that the existing price is still well below the current international average of over $300 and that it will have to be adjusted accordingly. Anatoly Podmyshalsky argued that even Belarus, Russia’s closest ally, is currently paying more than Armenia.
According to Movsisian, Armenia has no choice but to accept this reality. He said that the Armenian government and ARG had planned to buy Russian gas at international prices by 2012 but that the economic crisis will slow the transition.
“Of course, switching to that regime will be tough,” Movsisian told journalists. “But if gas has that price all over the region, what else can we do?”
The minister said Yerevan has not yet discussed with the Russians the time and scale of the next tariff rise. “But their approach is that gas must eventually be sold at the same price both inside and outside Russia,” he said.
The most recent tariff hike led ARG, 80 percent of which is owned by the Russian giant, to raise the gas price for Armenian households by 37.5 percent. The price rise for corporate consumers was less drastic.
Armenia’s dependence on Russian gas was supposed to ease with the construction in late 2008 of a gas pipeline from neighboring Iran. ARG began importing modest amounts of Iranian gas in May 2009.
The monetary cost of that gas is still not known. Armenia is paying for it with electricity supplies to Iran. The volume of the gas-electricity exchange is due to increase substantially in the next few years.