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Yerevan Wants Russia’s Gazprom To Change Pricing Policy


RUSSIA – Flags wave outside of the Russian Gazprom company's headquarters in Moscow, January 21, 2020

Gazprom should stop trying to make Russian natural gas more expensive for consumers in Armenia, Prime Minister Nikol Pashinian said on Wednesday, pointing to the coronavirus-related collapse in global energy prices.

Armenia’s Gazprom-owned gas distribution network asked public utility regulators a month ago to allow it to raise by an average of 11 percent the prices of gas supplied by it to Armenian households and corporate consumers. The Gazprom Armenia network argued that they have remained unchanged despite a 10 percent rise in Gazprom’s wholesale price for Armenia which took effect in January 2019

The move followed the Armenian government’s calls for Gazprom to cut the wholesale tariff. The government hopes that such a reduction would widen Gazprom Armenia’s profit margins and at least keep internal Armenian prices unchanged.

Speaking during the government’s question-and-answer session in the parliament, Pashinian said he understands Gazprom’s desire to help its Armenian subsidiary make “decent profits” and use them for vital repairs and maintenance of the gas distribution network.

“But we believe that the company of our strategic partner country should display a different approach given this global crisis and the collapse of the energy market, and we will try to talk to our partners,” he said, answering a question from a pro-government parliamentarian.

Pashinian discussed the issue with Russian President Vladimir Putin in an April 6 phone call.

Two weeks later, Russian Foreign Minister Sergei Lavrov dismissed complaints that European Union member states are now paying less for Russian gas than Armenia and Belarus because of the collapse in international oil prices. He argued that that unlike EU consumers, the two ex-Soviet states allied to Russia buy Russian gas at fixed prices that had been set well below international market-based levels.

Armenian Deputy Prime Minister Mher Grigorian countered that Russian gas has never been as cheap for Armenia as was claimed by Lavrov. He said that Yerevan asked Gazprom for a deeper discount primarily because the Russians want to raise the gas price.

Grigorian also dismissed Lavrov’s criticism of ongoing criminal investigations into major Russian companies operating in Armenia and the state-owned Russia Railways network in particular.

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