Armenia’s Russian-owned national gas distribution company said on Monday that it does not yet plan to seek a further increase in its tariffs despite recent weeks’ significant depreciation of the Armenian dram.
The Gazprom Armenia network buys natural gas from Russia at a price set in U.S. dollars and sells it to Armenian households and businesses in drams. The dram has weakened against the dollar by over 15 percent since the beginning of November, meaning that the company is having to pay its Russian parent company, Gazprom, more in real terms.
According to Shushan Sardarian, the Gazprom Armenia spokeswoman, the operator sees “no necessity as yet” to ask the Public Service Regulatory Commission (PSRC) to adjust the domestic gas prices accordingly. “True, the company is incurring losses but that is not sufficient grounds for urgently appealing to the commission,” she told RFE/RL’s Armenian service (Azatutyun.am).
Sardarian declined to specify whether the company will seek a higher gas tariff if the Armenian currency continues to depreciate. “Time will tell,” she said.
The PSRC already raised the gas price for households by more than 18 percent in June 2013. The utility regulator blamed the highly unpopular measure on the increased cost of Russian gas delivered to Armenia.
At $190 per thousand cubic meters, the wholesale gas price is still well below international market levels currently exceeding $300 per thousand cubic meters. Russian officials have attributed the price discount to the Armenian government’s 2013 decision to join the Russian-led Eurasian Economic Union.