By Atom MarkarianAn offshore-registered trading company reportedly linked to senior Armenian government officials enjoys a virtual monopoly on imports of petrol to Armenia, according to a government report released this week.
The annual report by the government’s Commission to Protect Economic Competition reveals that the London-registered Mika Limited firm accounted for 78 percent of gasoline supplied to Armenia last year. Most of the fuel was distributed inside the country through smaller Armenian companies after being shipped to the Georgian Black Sea port of Poti.
Mika is owned by Mikhail Baghdasarov, a Russian businessman of Armenian descent who is reportedly close to powerful Defense Minister Serzh Sarkisian. Some observers say the company owes its dominant position in the highly lucrative business to Sarkisian’s sponsorship. The minister, who is a close associate of President Robert Kocharian, is often accused by his political opponents of stifling competition in the fuel market. They point to the fact that global oil prices rarely have direct effects on Armenia.
The Commission’s report does not mention any political factors, saying only that no Armenia-based company can afford leasing oil tankers and purchasing the fuel on a large scale. But it does have misgivings about Mika’s privileged status. The government agency, which is charged with combating unfair business practices, also expresses alarm at the fact that the number of Armenian companies involved in fuel imports has shrunk from 25 to 12 over the past three years.
The Commission’s report highlights the existence of other de facto monopolies. One of them, a company called Astghatsuyts, accounted for 96 percent of the equally lucrative imports of sugar and 78 percent of spirits last year. Astghatsuyts is owned by Samvel Aleksanian, a wealthy businessman who is currently running unopposed for the Armenian parliament.