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Armenia ‘Negotiating’ Natural Gas Price With Russia


Armenia -- A natural gas distribution facility, undated.
Armenia -- A natural gas distribution facility, undated.

Armenia is conducting negotiations with Russia for the price of natural gas not to be raised in the near future, the chief of a state regulatory body has told Armenian lawmakers.

During a question-and-answer session in the Armenian parliament on Wednesday, Robert Nazarian, the head of the Public Services Regulatory Commission (PSRC), was asked whether a rise in electricity prices was expected this or next year.

Armenia -- Robert Nazarian, the Chairman of the Public Services Regulatory Commission, 17 June, 2014
Armenia -- Robert Nazarian, the Chairman of the Public Services Regulatory Commission, 17 June, 2014

​Nazarian first said that the tariffs for electricity and natural gas are “directly interrelated” and then cited “fluctuations” of the national currency exchange rate as a major factor in determining energy tariffs.

The Armenian dram lost more than 15 percent of its value against the U.S. dollar and other major international currencies late last year.

“In this connection at this moment the Armenian side is conducting negotiations with the Russian side for the natural gas price not to be raised because of the dram-dollar fluctuations,” said Nazarian without disclosing any details of the negotiations.

He said that only after the completion of these talks electricity producing stations in Armenia and companies participating in the country’s energy market will be able to evaluate the situation and make corresponding requests related to electricity tariffs. “At this moment the situation is still uncertain,” the official said.

The PSRC raised the energy price by 27 percent in July 2013, pointing to the increased cost of Russian natural gas, which generates more than one-third of Armenia’s electricity. The price went up by another 10 percent in July 2014 as the PSRC cited the need to end mounting financial losses incurred by the Electricity Networks of Armenia, a Russian-owned national power utility.

Remarkably, in December 2013 when Armenia sold its remaining 20-percent share in the domestic gas distribution network to Russia’s state-run gas monopoly Gazprom, chief of the Armenian president’s staff Vigen Sarkisian declared that as a result of the sale the price of Russian natural gas supplied to Armenia would not be changed in the next five years.

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