Armenia’s state utility regulators have revealed the scale of natural gas and electricity price rises that will come into effect soon because of the increased cost of gas imported from Russia.
Robert Nazarian, head of the Public Services Regulatory Commission (PSRC), announced the new, significantly higher energy tariffs for households during hearings held in the Armenian parliament late on Thursday. He said they will take effect in early July.
According to Nazarian, the PSRC will raise the gas price from 132 drams to 156 drams (38 U.S. cents) per cubic meter in response to a request from ArmRosGazprom (ARG), the national gas distribution company.
Earlier this month, ARG asked the regulatory body to allow an even steeper increase that would set the tariff at 221 drams per cubic meter. The company argued that Russia’s Gazprom monopoly has raised the gas price for Armenia by 50 percent to $270 million per thousand cubic meters.
The Armenian government said afterwards that it will subsidize the new tariff to cut it by 30 percent. The government has yet to clarify the source of those subsidies. Officials have said only that they will not be financed from the state budget.
Speaking during the hearings, Energy Minister Armen Movsisian reiterated that the government is negotiating with Russia over the subsidies. Movsisian refused to elaborate.
Observers have suggested that Yerevan is ready to cede more energy or other business assets to the Russians to limit the price hike, which will hit hard many Armenians.
The more expensive gas is expected to push up the cost of other key goods and commodities, notably electricity. Nazarian announced that the PSRC will raise the energy tariff by almost 27 percent to 38 drams per kilowatt/hour.
Opposition deputies participating in the hearings dismissed the official justifications for the substantially higher gas price, saying that ARG’s profit margin is disproportionately large and should be curtailed. Nazarian rejected those claims in an angry verbal exchange with Hrant Bagratian, an outspoken former prime minister representing the opposition Armenian National Congress (HAK).
Opposition lawmakers also stood by their allegations that the price of the Russian gas went up last year and that the government hid this fact to avoid damage to President Serzh Sarkisian’s and his Republican Party’s chances in major elections held over the past year. “The Armenian authorities concealed the reality from the people of Armenia, and the people will have to pay for their choice in the parliamentary, presidential and municipal elections,” charged Nikol Pashinian, another HAK deputy.
Data from the Armenian customs service suggests that Armenia began paying $220-240 per thousand cubic meters of Russian gas in the second half of last year. The officially declared gas price stood at $180 per thousand cubic meters.