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Armenian Gas Operator Seeks Gas Price Rise


Armenia - The Gazprom Armenia headquarters in Yerevan, 31Oct2014.

Armenia’s national gas distribution company owned by Russia’s Gazprom giant on Wednesday asked public utility regulators to raise its retail prices set for households and corporate consumers.

“The [Gazprom Armenia] company wants an 11 percent increase in the existing average tariff,” Garegin Baghramian, the chairman of the Public Services Regulatory Commission (PSRC), told RFE/RL’s Armenian service.

According to a Gazprom Armenia application publicized later in the day, the company is seeking a more than 16 percent increase in the gas price set for manufacturing and agricultural firms. At the same time it is ready to slightly cut the price for the majority of households, which currently stands at an equivalent of $290 per thousand cubic meters. Still, it wants to scrap a sizable price discount enjoyed by low-income families.

Under Armenian law, the PSRC has to make a decision on the requested tariff revision within the next 80 days.

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.

Baghramian acknowledged that the gas distribution network has reason to seek price rises given the extra costs incurred by it. But he said this will no longer be the case if Gazprom lowers the wholesale price of Russian gas for Armenia.

The Armenian government requested such a price reduction on Tuesday in apparent anticipation of the application filed by Gazprom’s Armenian subsidiary.

In a letter to Gazprom Chairman Alexei Miller, Deputy Prime Minister Mher Grigorian argued that international oil prices, which greatly determine the cost of natural gas, have fallen sharply over the past month. Grigorian also said that economic disruptions caused by the coronavirus pandemic will significantly reduce energy consumption levels in Armenia unless they are offset by a lower gas price.

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