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Natural Gas Operator Becomes Armenia’s Top Taxpayer


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

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

The ArmRosGazprom (ARG) national gas distribution company has become Armenia’s leading corporate taxpayer this year due to a more than 40 percent surge in its tax contributions to the state, according to the latest government data.

The figures released on Tuesday by the State Revenue Committee (SRC) show ARG paying 22.6 billion drams ($55.8 million) in various taxes in the first nine months of 2012.

The reasons for this sharp increase were not fully clear, with official statistics indicating that imports of mainly Russian natural gas and other minerals to Armenia rose by only 13 percent, to $641.6 million, in January-September. Gas distribution within the country was similarly up by 12.3 percent in this period.

An ARG spokesperson cited the latter figure when asked by RFE/RL’s Armenian service (Azatutyun.am) to comment on the company’s increased payments to the SRC. The official also said that those payments include taxes collected from electricity generated at a newly built thermal-power plant owned by ARG.

This uncertainty is bound to stoke more media speculation about a secret rise in the price of Russian gas delivered to Armenia. The Armenian customs service, which is part of the SRC, has already given weight that speculation with its import data.

The service said late last month that the country imported 304.6 million cubic meters of Russian gas worth $74.4 million in the third quarter of this year. This translates into a gas price of roughly $244 per thousand cubic meters, compared with $180 per thousand cubic meters declared by the Armenian government. Similar customs data for the first half of 2012 suggested that Armenia paid Russia’s Gazprom gas monopoly $220 million per thousand cubic meters of gas.

An increased cost of the Russian gas would mean corresponding rises in the 20 percent value-added tax (VAT) paid by ARG. VAT accounts for most of the company’s tax contributions.

Some media outlets and opposition politicians claim that the government has secretly sold its 20 percent stake in ARG to Gazprom to make sure that Armenian consumers are not affected by the price hike until next year’s presidential election. Gazprom owns the remaining 80 percent of ARG.

Both the government and ARG have not explicitly denied these claims. Deputy Energy Minister Ara Petrosian on Tuesday stuck to the official line that negotiations with Gazprom on the new gas price are continuing and that the tariff remains unchanged for households and other consumers for now.

“Negotiations on the gas price are still going on and so naturally I have no new information at this point,” Petrosian said in the parliament, responding to an opposition lawmaker’s question.

According to the SRC, ARG has replaced Armenia’s largest metallurgical enterprise, the Zangezur Copper-Molybdenum Combine (ZCMC), as the number one taxpayer. The ZCMC is second in the SRC rankings for January-September, followed by the country’s leading importer of basic foodstuffs, two largest mobile phone operators and two fuel suppliers.
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