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Armenian Government To Subsidize Higher Gas Price


Armenia -- A demonstration against the impending sharp increase in the price of natural gas, Yerevan, 16May2013

Armenia -- A demonstration against the impending sharp increase in the price of natural gas, Yerevan, 16May2013

Facing growing public discontent, the Armenian government pledged on Thursday to alleviate the impending sharp rise in the price of natural gas with major subsidies that will apply to all individual consumers.

Prime Minister Tigran Sarkisian said he has already communicated the government’s decision to the Public Services Regulatory Commission (PSRC), which is due to consider a price rise requested by ArmRosGazprom (ARG), the national gas distribution company.

ARG asked the regulatory body to allow a 64 percent surge in the gas tariff for households earlier this week, citing the increased cost of natural gas imported from Russia. The PSRC is widely expected to at least partly grant the request.

Both Sarkisian and the commission chairman, Robert Nazarian, revealed that ARG is now charged $270 per thousand cubic meters of Russian gas, up from the previous officially declared price of $180 per thousand cubic meters. Customs data suggests that ARG paid $220-240 for the gas in the second half of last year despite government assurances that Russia’s Gazprom giant has not raised its price for Armenia.

“We stated in our letter to the PSRC that the government of Armenia will subsidize the [new] gas tariff by 30 percent,” Sarkisian said during a weekly session of his cabinet. “Secondly, I want to inform our citizens that socially vulnerable families will receive assistance so that the higher gas price does not have a negative impact on their family budgets.”

Sarkisian did not specify the total monetary value of those subsidies or the additional compensation planned for poor households.

As the premier chaired the cabinet meeting about 100 people demonstrated outside his office in Yerevan to condemn the impending gas price hike, which is expected to push up the cost of other goods and services in the country. Most of the protesters were opposition and civic activists.

“This is a spontaneous gathering which is totally in tune with our concerns,” said Armen Rustamian, a leader of the opposition Armenian Revolutionary Federation (Dashnaktsutyun). “People have gathered here, realizing just how disastrous consequences such price rises could have.”

Zaruhi Postanjian, another opposition politician taking part in the protest, blamed the price rise on “inept and criminal government policies.” She said Armenians should “revolt” against it.
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