The Public Services Regulatory Commission (PSRC) said Armenian households will continue to pay up to 148 drams (40 U.S. cents) per cubic meter of the gas in the coming months.
“Gazprom Armenia [operator] can always apply for a review [of the retail prices,]” said Mesrop Mesropian, the PSRC chairman. “But in practice, with our decision today we closed that issue until December 31.”
Ashot Hakobian, the Gazprom Armenia chairman, told RFE/RL’s Armenian Service after the PSRC meeting that the subsidiary of Russia’s Gazprom giant has no plans yet to request a price rise.
In a letter to the Armenian government sent in late May, Russian Energy Minister Sergei Tsivilev said that its efforts to join the European Union “do not correspond to the nature of the partnership between the governments and economic entities of our countries.” He said Moscow could therefore suspend or scrap a 2013 agreement to exempt Russian natural gas as well as oil products and diamonds purchased by Armenia from Russian export duties.
The agreement has served as the basis for the wholesale gas price for Armenia which is set well below international market levels. President Vladimir Putin and other Russian leaders warned of an end to that discount earlier in May as Moscow stepped up economic pressure on Yerevan over its pro-Western foreign policy.
“We supply gas to Armenia at a quarter of its price, to our own detriment (the price in Armenia is $177.50 per thousand cubic meters, while in Europe it's $633 per thousand cubic meters) … What we get in return is [Prime Minister Nikol] Pashinian's meanness and dishonesty. This cannot continue,” said Vyacheslav Volodin, the State Duma speaker.
Pashinian dismissed the Russian threats during an election campaign rally on May 27. He claimed that Armenia sill soon be awash with “billions and trillions” of dollars as a result of transport links and other commercial ties forged with neighboring Turkey and Azerbaijan. The country can therefore afford a higher gas price, he said.
Russia accounts for at least 80 percent of natural gas imported to Armenia. In addition to being supplied to households and power plants, Russian gas is also heavily used in some sectors of the country’s economy such as agribusiness.