By Atom MarkarianState regulators gave on Friday the green light to a drastic increase in the price of natural supplied to Armenian households and industrial enterprises, citing Russia’s recent decision to double its gas tariff for Armenia.
The move indicated the failure of the Armenian government’s three-month efforts to have the Russians reverse or at least scale back the price hike.
The Public Service Regulatory Commission ruled allow the ArmRosGazprom (ARG) operator to charge individual consumers 90 drams (20 U.S. cents) per one cubic meter of gas, or 50 percent more than it does now, starting from April 10. The gas price for thermal power plants and chemical enterprises will nearly be doubled to 66 drams per cubic meter.
The approved tariffs are only slightly lower than those requested by ARG. Not surprisingly, its top executives expressed satisfaction with the commission’s decision. The company’s deputy executive director, Ashot Hovsepian, admitted that Armenian households, which increasingly use natural gas for heating purposes, will be hit hard by the price rise. “The burden on the population will be quite heavy,” Hovsepian said, predicting that gas consumption will fall by at least 10 percent as a result.
The highly unpopular measure is also expected to push up the retail price of electricity which many Armenians already find barely affordable. Senior officials at the Armenian Energy Ministry have estimated it will likely rise by 15 percent to 29 drams (6.5 cents) per kilowatt/hour.
The new tariffs approved by the regulatory body are the strongest indication yet that Russia’s state-run Gazprom monopoly will press ahead with its decision to raise the wholesale cost of gas supplied to Armenia from $56 to $110 per thousand cubit meters. Similar price hikes were also announced for several other former Soviet republics, including Ukraine and Georgia.
Unlike those states, Armenia has not expressed a desire to join NATO and maintains close political and military ties with Russia. This fact has provoked unprecedented anti-Russian statements from pro-government politicians and media commentators in Yerevan in recent months. President Robert Kocharian warned through a spokesman in January that Gazprom’s hard bargain is eroding the traditionally pro-Russian public opinion in Armenia and that Moscow “has to think about doing something about that.”
Kocharian has twice met his Russia’s President Vladimir Putin to discuss the matter. The two leaders apparently failed to reach agreement. Gazprom has so far only agreed to delay the enforcement of its new gas tariff until April 1.