Prime Minister Karen Karapetian assured opposition lawmakers on Wednesday that the Armenian government will not reverse a sizable reduction in the domestic prices of natural gas after next year’s parliamentary elections.
He also insisted that the government will not hand over more energy facilities or other assets to Russia, Armenia’s main gas supplier, to finance the price cuts.
“Will the gas price rise after the elections? No,” Karapetian said during a question-and-answer session in the Armenian parliament. “Will Armenia pay for that with any strategic or other assets after the elections? No.”
The price cuts proposed by the country’s Russian-owned gas distribution network were approved by Armenia’s Public Services Regulatory Commission (PSRC) late last month. The new tariffs will come into effect on January 1, just over three months before parliamentary elections which the ruling Republican Party o Armenia expects to win.
Armenian officials have made clear that despite the lower retail prices set for both households and corporate consumers, Russia’s Gazprom monopoly will not reduce its wholesale gas tariff for Armenia. They say that the Gazprom-Armenia operator plans to make up for a resulting loss in revenue through cost saving and greater consumption expected as a result of cheaper gas.
The authorities in Yerevan have repeatedly ceded major energy assets to Gazprom in the past to repay their debts to the Russian giant or keep Russian gas relatively cheap for Armenia.
They triggered a scandal in late 2013 after disclosing a $300 million debt to Gazprom which resulted from a secret subsidizing of gas prices in the country. The government repaid that debt by selling its remaining 20 percent stake in the Armenian gas distribution network to Gazprom.
Karapetian, who managed the network from 2001-2010, defended that deal on Wednesday. “I don’t see anything illogical in paying for something with your assets in order to reduce our foreign debt,” he said.
The premier also dismissed an opposition lawmaker’s suggestion that the authorities could have slashed the gas price years ago. “That was not possible,” he said. “The price of gas for Armenia has always been the lowest possible in the region.”