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Yerevan ‘Still Hopes’ To Prevent Further Rise In Russian Gas Price


Armenia -- Energy and Natural Resources Minister Armen Movsisian holds a news conference, 21Dec2010.

Armenia -- Energy and Natural Resources Minister Armen Movsisian holds a news conference, 21Dec2010.

The Armenian government still hopes to prevent a further sizable increase in the price of Russian natural gas supplied to Armenia, Energy and Natural Resources Minister Armen Movsisian said on Tuesday.


The cost of Russian gas for Armenia already rose by 14 percent last year and by another 17 percent, to $180 per thousand cubic meters, in April 2010. That led state regulators in Yerevan to approve corresponding increases in domestic gas prices sought by the national gas distribution company, ArmRosGazprom (ARG). The latter is mostly owned by Gazprom.

Russia’s Gazprom monopoly announced in September plans to bring its gas tariffs for Armenia, Moldova and Belarus up to “market-based” international levels in the coming years. Gazprom currently sells gas to western and central European countries for over $300 per thousand cubic meters.

Armenian officials said at the time that they are holding negotiations with the Russian energy giant over the issue. According to Movsisian, the talks are still going on. “We are doing our best to keep the tariff at this year’s level,” the minister told a news conference.

Speaking to journalists in Yerevan on Tuesday, a top Gazprom executive, Anatoly Podmyshalsky, insisted that Russian gas will become more expensive for Armenian consumers from April 2011.

Podmyshalsky, who is also ARG’s deputy chairman, was quoted by the Arka news agency as saying at the same time that the two sides might work out “other variants of calculating the cost of the gas” in the next few months. He did not elaborate.

The 2009 and 2010 price hikes have already forced many Armenian households to cut back on the use of gas, their main source of winter heating. Movsisian estimated that gas consumption in the country will fall by at least 15 percent this year.

“The rise in the gas price is certainly affecting the volume of gas consumption by the population,” he said.
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