Armenia’s state utility regulators formally approved on Friday substantial increases in the prices of natural gas and electricity for households, citing the increased cost of gas imported from Russia.
The Public Services Regulatory Commission (PSRC) raised the gas price from 132 drams to 156 drams (38 U.S. cents) per cubic meter. It also authorized an almost 27 percent surge in the domestic electricity tariff effective from July 7.
The ArmRosGazprom (ARG) national gas distribution company last month asked the regulatory body to allow it to charge individual customers 221 drams per cubic meter. The company argued that Russia’s Gazprom monopoly raised the gas price for Armenia by 50 percent to $270 million per thousand cubic meters in April.
The Armenian government said afterwards that it will subsidize the new tariff to cut it by 30 percent. The government has yet to clarify the source of the subsidy, saying only that it hopes to secure relevant financial assistance from Russia
Robert Nazarian, the PSRC chairman, also did not shed light on the promised subsidy after the unanimous decisions made by his commission. “After [Russian-Armenian] negotiations are over, we and the public will be informed,” he told journalists.
Vartan Harutiunian, the ARG chief executive who also attended the commission meeting, insisted that the government will subsidize the gas price regardless of the outcome of the ongoing negotiations.
The more expensive gas is expected to push up the cost of other key goods and commodities, notably electricity. Natural gas is used for generating 35-40 percent of Armenia’s electricity. The PSRC announced that the electricity price will therefore rise from 30 to 38 drams per kilowatt/hour.
Opposition politicians and other government critics have condemned the impending energy price hikes in recent weeks, dismissing the official justifications for these highly unpopular measures. They say that the authorities could have kept the gas price virtually unchanged at the expense of what they see as ARG’s disproportionately large profit margins. Nazarian rejected such claims during parliamentary hearings on the issue late last month.