The Armenian government and Russia’s Gazprom monopoly are continuing to negotiate on a new price of Russian natural gas delivered to Armenia, Prime Minister Tigran Sarkisian said on Wednesday.
“There are rules of the game set by the Russian Federation, and naturally every year a negotiating process starts over what the future gas price will be,” he told the parliament. “As of now negotiations are still not over.”
The government announced the start of those talks last spring following reports that Gazprom is planning a sharp rise in its gas price for Armenia. It was set at $180 per thousand cubic meters in April 2010 and, according to Armenian officials, has not changed since then.
The Armenian customs service raised questions about the declared tariff with information posted on its website in August. It said that said the country imported almost 2 billion cubic meters of Russian gas, worth roughly $240 million, in the first half of this year.
This led analysts and media commentators to suggest that the actual price was confidentially raised to $220 per thousand cubic meters. Energy Minister Armen Movsisian and the chief executive of Armenia’s gas distribution network denied that last month.
President Serzh Sarkisian discussed the issue with his Russian counterpart Vladimir Putin when they met in Moscow on August 8. Sarkisian said after the meeting that they reached a “mutual understanding” on the new price. But he did not elaborate.
Natural gas is used for generating about one-third of Armenia’s electricity and is the main source of winter heating. It is also liquefied and pressurized to power most public buses and around half of the personal cars. A gas price hike can therefore have a major impact on the cost of life in the country.