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Armenian Gas Operator May Seek Price Rise


Armenia - The Gazprom Armenia headquarters in Yerevan, October 31, 2014.

Armenia’s national gas distribution company owned by Russia’s Gazprom giant confirmed on Friday that it may ask public utility regulators to raise its retail prices set for households and corporate consumers.

“The company is discussing the issue of revising the tariffs,” said a spokesman for the Gazprom Armenia network. He did not specify the scale of the possible price rise.

The retail prices are set by the Public Services Regulatory Commission (PRSC). Its chairman, Garegin Baghramian, did not comment on the likelihood of their increase when he spoke to RFE/RL’s Armenian service. He said only that the two sides are continuing their discussions on “long-term pricing.”

The cost of Russian gas supplied to Armenian consumers remained unchanged after Gazprom raised its wholesale price for Armenia from $150 to $165 per thousand cubic meters in January 2019. This translated into additional major expenses for Gazprom Armenia, which already reported growing financial losses in the course of 2018. Armenian officials have said until now that the gas network can offset those losses through cost-cutting.

In a statement issued on New Year’s Eve, Gazprom announced that it will not raise further the price of gas supplied to its Armenian subsidiary at least before the end of 2020.

The announcement came after months of negotiations between Armenian and Russian government officials and Gazprom executives. Armenian Prime Minister Nikol Pashinian and Russian President Vladimir Putin discussed the issue when they met in Yerevan in October.

“We talked about a gas price for Armenia that will not break Armenia’s economic dynamics,” Pashinian said afterwards.

One of Pashinian’s deputies, Mher Grigorian, expressed confidence in November that the domestic gas tariffs will not rise before April 2020.

Armenian households currently pay 139 drams (30 U.S. cents) per cubic meter of Russian gas.

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