One of Armenia’s main fuel importers sought to justify on Wednesday a continuing rise in petrol and diesel prices in the country, citing the increased cost of oil and higher taxes introduced by the Armenian government.
The fuel prices rose by over 2 percent late last week, the third such increase in two months. One liter of gasoline now costs at least 450 drams (94 U.S. cents) at filling stations in Yerevan. The minimum price stood at 390 drams per liter in early December.
Barsegh Beglarian, whose Flash company accounts for roughly one-third of fuel imports to the country, said the latest price rise should have occurred in early January. “Taking into account the purchasing power of our people, we were using up our stockpiles to keep the price [lower] until January 15,” he told RFE/RL’s Armenian service (Azatutyun.am).
Beglarian claimed that even with the existing prices his company is struggling to avoid financial losses. “International [oil] prices have gone up dramatically,” he said.
Beglarian also blamed the price hikes on higher taxes on fuel which took effect on January 1. He criticized the government’s decision to raise those taxes as “not honest,” saying that Flash executives warned the authorities last year that it would push up the prices.
Beglarian insisted that his company is not interested in the higher petrol prices because more car owners will now switch to pressurized or liquefied natural gas which is already used by most vehicles in Armenia.
President Serzh Sarkisian expressed concern over the increased fuel prices at an emergency meeting with senior government and Central Bank officials held on January 10. By contrast, Prime Minister Karen Karapetian downplayed the price hikes afterwards. He claimed in particular that petrol is still cheaper in Armenia than in neighboring Georgia.
Karapetian reiterated his position on the issue during the government’s question-and-answer session in the parliament on Wednesday. “Petrol doesn’t affect transportation of people or goods,” he said. “It’s only used by personal cars. If their owners don’t want to use petrol they can switch to gas.”
The gas price also rose this month because of the higher excise duties. Karapetian argued that it is now as high as it was in 2015.
“These factors cannot influence overall prices,” insisted the premier. “Even if they do, [that impact] will be negligible.”
Karapetian also reaffirmed the government’s pledges to subsidize the price of diesel fuel that powers tractors and other agricultural machinery. The government hopes that this will prevent farmers from raising the prices of wheat and other agricultural produce.
Fuel imports to and sales in Armenia have long been controlled by Flash and one or two other companies belonging to government-linked individuals. Opposition politicians and other critics of the government say this is another reason for the higher fuel prices.
Even the Armenian Revolutionary Federation (Dashnaktsutyun), Sarkisian’s junior coalition partner, has complained about the lack of competition in this sector. A Dashnaktsutyun parliamentarian wondered on Wednesday why the government is not trying to attract more importers, notably large Western oil firms, into the sector.
“That doesn’t depend on government policies,” replied Karapetian. “That depends on the market attractiveness and profitability. It’s not a secret that our market is quite small and not attractive to big players.”