The Armenian government is discussing with Russian officials ways of subsidizing the increased cost of Russian natural delivered to Armenia, Energy and Natural Resources Minister Armen Movsisian said on Wednesday.
The government promised such subsidies last week after announcing that Russia’s Gazprom giant has raised the gas price by 50 percent. Prime Minister Tigran Sarkisian said it will cut the new gas tariff for Armenian households, which is due to be set by state utility regulators soon, by 30 percent.
Sarkisian did not specify the sources of financing the price discount. Other officials suggested that the promised subsidies are unlikely to be financed from the Armenian state budget.
Commenting on the issue, Movsisian said, “Negotiations are still going on with the Russian side, and relevant discussions are also taking place in our government. After summing up all this we will say how those issues are going to be solved.”
Movsisian did not clarify just how Gazprom or the Russian government could help Yerevan raise funds for the subsidies. In that context, he ruled out the possibility of selling Armenia’s largest hydroelectric plant, located in southeastern Syunik province, to the Russians.
Movsisian also insisted that even after the price hike the Russian gas will be cheaper than natural gas delivered to Armenia from neighboring Iran in smaller amounts. “The Iranian gas price is higher than the price set by Russia. Therefore, it cannot be an alternative in terms of the price,” the minister told reporters on the sidelines of a conference on the Armenian energy sector organized by the U.S. Embassy in Yerevan.
According to official data, Armenia imported around 500 million cubic meters of gas from Iran last year through a pipeline that was completed in 2007. The total volume of Russian gas supplies stood at almost 2 billion cubic meters in 2012.
Opposition politicians and other government critics have faulted the authorities for the modest volume of Iranian gas deliveries. Vartan Ayvazian, the chairman of an Armenian parliament committee on economic issues, indicated on Tuesday that the Russians have prevented Yerevan increasing them. He claimed that the Armenian part of the pipeline from Iran was handed over to Armenia’s Gazprom-controlled gas distribution network under pressure from Moscow.
Movsisian flatly denied that, however. “There has never been such pressure,” he said.