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Regulators Object To Price Rises Sought By Gas Operator


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

Public utility regulators on Monday told Armenia’s national gas distribution company owned by Russia’s Gazprom to scale back plans to raise its retail prices of natural gas by an average of 11 percent.

The Public Services Regulatory Commission (PSRC) said the Gazprom Armenia network should settle for more modest price rises that would average 4.6 percent.

The network formally asked the PSRC to allow the higher tariffs sought by it on April 1. It argued that the cost of Russian gas supplied to Armenian consumers has remained unchanged since Gazprom raised its wholesale price for Armenia from $150 to $165 per thousand cubic meters in January 2019. Gazprom’s Armenian subsidiary has incurred major losses as a result.

In its tariff application sent to the PSRC, Gazprom Armenia offered to slightly cut the gas price for the majority of households, which currently stands at an equivalent of $290 per thousand cubic meters. However, it demanded the scrapping of a 36 percent price discount enjoyed by low-income families.

The PSRC objected to this demand, saying that gas must not become more expensive for individual consumers. It also urged the gas operator to reconsider plans for a sizable increase in gas tariffs set for manufacturing and agricultural firms. They should go up by less than 6 percent, said the regulatory body.

A spokeswoman for the PSRC, Liana Azizian, told RFE/RL’s Armenian service that the commission will make a final decision on the Gazprom Armenia application after discussing the issue with the company’s representatives, energy experts and civil society members. The discussion is scheduled for Thursday, she said.

Shortly before Gazprom Armenia requested the price hikes, the Armenian government urged the Russian energy giant to cut its wholesale gas price for Armenia. It argued that global energy prices have collapsed because of the coronavirus pandemic.

Prime Minister Nikol Pashinian and Russian President Vladimir Putin discussed the matter by phone on April 6. They apparently failed to reach an agreement.

Speaking at a May 19 video conference with fellow leaders of the Eurasian Economic Union (EEU), Putin rejected Armenia’s and Belarus’s calls for the Russian-led trade bloc to set uniform energy tariffs which would reduce the cost of Russian natural gas imported by them.

Armenian Deputy Prime Minister Mher Grigorian said afterwards that “the issue is not closed” and that Yerevan will continue to press for the creation of a single EEU energy market.

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