Yerevan Eyes Another Drop In Russian Gas Price

Armenia - Gazprom Chairman Alexei Miller (L) and the chief executive of Armenia's gas distribution network, Vartan Harutiunian, sign an agreement on a 9 percent decrease in the Russian gas price for Armenia, Yerevan, 7Apr2016.

The Armenian authorities hope that Russia will again cut this year the price of its natural gas delivered to Armenia, a senior official in Yerevan said on Thursday.

Prime Minister Karen Karapetian last week told the Armenian ministries of energy and labor as well as state utility regulators to explore ways of making electricity and gas cheaper for low-income households and some businesses.

“This must be done at the expense of economic entities that provide such services, rather than the state budget,” Karapetian said in a clear reference to energy suppliers.

Robert Nazarian, the head of the Public Services Regulatory Commission (PRSC), likewise said that the authorities have no plans to subsidize domestic energy tariffs.

“Don’t you rule out the possibility of the gas price at the border being lowered?” Nazarian told RFE/RL’s Armenian service (Azatutyun.am), referring to the wholesale price set by Russia’s Gazprom gas monopoly.

“If there is a reduction in the gas price at the border, we will revise the [retail] tariffs,” he said.

Gazprom, which provides the bulk of Armenia’s gas, already lowered its price by 9 percent, to $150 per thousand cubic meters, as recently as in April. Yerevan had requested a price cut earlier in 2016, citing the collapse in international oil prices tied to the cost of gas.

Russian as well as Iranian gas account for roughly one-third of electricity generated in Armenia.

Karapetian has lived and worked in Russia for the last five years, holding senior executive positions in Gazprom’s Russian subsidiaries. He ran Armenia’s Gazprom-controlled gas distribution network from 2001-2010.