The Armenian government clarified on Thursday that it will subsidize a temporary price discount for tens of thousands of low-income families announced by the ArmRosGazprom (ARG) national gas distribution company.
“We guarantee the [financial] compensation to ArmRosGazprom,” Prime Minister Tigran Sarkisian said during a cabinet meeting that formally approved the measure effective from April 1.
Energy and Natural Resources Minister Armen Movsisian estimated that it will cost the government at least 500 million drams ($1.35 million). He said the funding will be made possible by the increased efficiency of the Armenian energy sector and a major thermal-power plant in particular.
Armenian households currently pay 132 drams (36 U.S. cents) per cubic meter of gas. The price for socially vulnerable families to be selected by the government will be set at 100 drams.
The government clarified that the 24 percent discount will be limited to one year and will cover up to 300 cubic meters of gas used by a household during that period.
Given the average volume of gas consumption in Armenia, this means that the poor families eligible for the subsidy will have to pay the regular gas price by the start of the next heating season. Consumption levels rise drastically in winter months.
Sarkisian insisted, nonetheless, that the discount is “substantial.” He said the “serious social measure” will apply to about 60,000 families.
The ARG chief executive, Vartan Harutiunian, on Wednesday spoke of 49,500 families qualifying for subsidized gas.
Bagrat Asatrian, a former Central Bank governor critical of the government, downplayed the significance of the discount, saying that it amounts to giving each of those households a meager 800 drams ($2.2) a month until April 2012.
“I also don’t accept this method of assistance,” Asatrian told RFE/RL’s Armenian service. “There are many poor families in Armenia that have no access to gas,” he said.