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Sarkisian Rules Out Another Gas Price Rise


Armenia -- The flags of the ARG national gas operator and its dominant Russian shareholder, Gazprom, undated.

Armenia -- The flags of the ARG national gas operator and its dominant Russian shareholder, Gazprom, undated.

President Serzh Sarkisian has ruled out a further increase in the price of natural gas in Armenia this year after discussing its continued deliveries by Russia’s Gazprom monopoly with his Russian counterpart Dmitry Medvedev.


The issue reportedly featured large during talks held by the two men in Saint Petersburg on Friday. The Armenian government had been trying to get Gazprom to reconsider its plans to raise its gas tariff for Armenia further in 2011.

The Armenian presidential press secretary, Armen Arzumanian, told journalists after the talks that Sarkisian and Medvedev reached agreement on the price. But he gave no details of that agreement, saying only that Armenian consumers will not be paying more for Russian gas at least until next year.

Arzumanian also said that the gas price for socially vulnerable categories of the population will even fall in 2011. The president has already instructed his government to work out “appropriate mechanisms” for ensuring such a discount, he said.

Sarkisian’s office refused to shed more light on the reported deal, referring all inquiries to ArmRosGazprom (ARG), the national gas distribution company mostly owned by Gazprom. But ARG also declined a comment.

Samvel Avagian, an independent economist, suggested that the Russians will after all raise the cost of their gas delivered to the Armenian border and that its prices inside the country will likely remain unchanged at ARG’s expense. “The implication [of Arzumanian’s announcement] is that the delivery price will apparently change,” he told RFE/RL’s Armenian service.

But Hrant Bagratian, a former prime minister affiliated with the opposition Armenian National Congress (HAK), insisted on Monday that the Russian side agreed not to raise the wholesale gas price because it understands that Armenians can not afford a higher tariff. He argued that gas consumption in the country has fallen considerably in recent years because of previous price hikes.

“Medvedev didn’t raise it not because he loves Serzh Sarkisian but because he realized that something stupid had been done,” Bagratian told journalists.

The cost of Russian gas for Armenia rose by 14 percent in 2009 and by another 17 percent, to $180 per thousand cubic meters, in April 2010. That led state regulators in Yerevan to approve a 37.5 percent surge in the gas price for households requested by ARG.

Gazprom announced in September plans to gradually bring its gas fees for Armenia, Moldova and Belarus up to “market-based” international levels in the coming years. The Russian energy conglomerate currently sells gas to western and central European countries for over $300 per thousand cubic meters.

According to Bagratian’s calculations, the retail price paid by Armenian households is as much as $387 per thousand cubic meters. The opposition politician claimed that this is the result of ARG’s inefficiency and disproportionately wide profit margins.
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