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Business Leaders Upset With Energy Price Hike


Armenia - Businessman Raffi Mkhchian is interviewed by RFE/RL, Yerevan 17August, 2015

Armenia - Businessman Raffi Mkhchian is interviewed by RFE/RL, Yerevan 17August, 2015

Two Armenian groups representing mostly small and medium-sized enterprises criticized on Monday the government for making clear that its recent decision to effectively freeze a controversial electricity price hike does not apply to businesses.

The government pledged to subsidize the electricity prices raised by over 17 percent amid nonstop street protests in Yerevan that broke out in late June. President Serzh Sarkisian said the subsidy will run at least until the end of a special international audit of Armenia’s national power utility.

Speaking at a weekly session of his cabinet, Prime Minister Hovik Abrahamian clarified that the subsidy will not cover electricity supplied to businesses. He said only some small firms using up to 250 kilowatts of energy per month might receive a tariff discount.

“At first, I thought that the prime minister is joking,” said Raffi Mkhchian of the Armenian Union of Exporters. “But then I realized that he was serious about it. They took a very dangerous step.”

Mkhchian, who owns a coffee processing and packaging firm, said the government’s decision will only increase the production costs of struggling Armenian manufacturers. He said they have already been hit hard by three earlier rises in energy tariffs approved by state regulators from 2009-2014.

Gagik Makarian, chairman of the Union of Employers, agreed, saying that the price hike will primarily affect local companies producing metal and plastic items and confectionery. He said that the vast majority of some 50,000 small and medium-sized firms operating in Armenia consume more than 250 kilowatts of power each firm, meaning that they cannot qualify for any discounts.

According to the Public Services Regulatory Commission (PSRC), a nominally independent body that sets utility tariffs, only about one-third of electricity generated in Armenia is supplied to households.

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