Yerevan Negotiating for Halt in Rising Russian Gas Prices

YEREVAN (RFE/RL)–The Armenian government is continuing to negotiate with Russia’s Gazprom monopoly in an effort to prevent a further rise in the price of natural gas imported by Armenia, Energy and Natural Resources Minister Armen Movsisian said on Thursday.

Movsisian told RFE/RL’s Armenian service that the two sides could reach agreement in “a few days” time.

The cost of Russian gas for Armenia already rose by 14 percent in 2009 and by another 17 percent, to $180 per thousand cubic meters, in April 2010. That led state regulators in Yerevan to approve a 37.5 percent surge in the gas price for households requested by the national gas distribution company, ArmRosGazprom (ARG). The latter is mostly owned by Gazprom.

Gazprom announced in September plans to gradually bring its gas tariffs for Armenia, Moldova and Belarus up to “market-based” international levels in the coming years. Gazprom currently sells gas to western and central European countries for over $300 per thousand cubic meters.

Russian television reported this week that the energy giant would like to raise the tariff for Armenia to about $200 per thousand cubic meters this year. Movsisian did not deny this but said the Armenian government still hopes to keep it unchanged for the time being.

The minister refused to elaborate on Yerevan’s negotiating strategy. “We will show our cards after the negotiations are over,” he said, speaking after a weekly cabinet meeting. “It makes no sense to do that earlier. There are things that can’t be publicized now. Just wait for a few more days.”

“We are presenting our arguments, they are presenting theirs,” continued Movsisian. “Both arguments are understandable. We just need to find a common denominator.”

“The important thing here is that they understand what our problem is,” he said without elaborating.

Movsisian told the Armenian parliament on Wednesday that he received a “strict instruction” from President Serzh Sarkisian to do his best to prevent another gas price rise.

The Armenian authorities are clearly mindful of the adverse socioeconomic impact of the measure sought by Gazprom. More expensive gas would not only hit hard many Armenians but also add to inflationary pressures on the domestic economy. Gas consumption in the country has fallen considerably in the last two years.


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