Further Gas Price Hike Ruled Out

Medvedev, Sarkisian discuss gas prices

YEREVAN (RFE/RL)—President Serzh Sarkisian has ruled out a further increase in the price of natural gas in Armenia this year after discussing its continued deliveries by Russia’s Gazprom monopoly with his Russian counterpart Dmitry Medvedev.

The issue reportedly featured large during talks held by the two men in Saint Petersburg on Friday. The Armenian government had been trying to get Gazprom to reconsider its plans to raise its gas tariff for Armenia further in 2011.

The Armenian presidential press secretary, Armen Arzumanian, told journalists after the talks that Sarkisian and Medvedev reached agreement on the price. But he gave no details of that agreement, saying only that Armenian consumers will not be paying more for Russian gas at least until next year.

Arzumanian also said that the gas price for socially vulnerable categories of the population will even fall in 2011. The president has already instructed his government to work out “appropriate mechanisms” for ensuring such a discount, he said.

Sarkisian’s office refused to shed more light on the reported deal, referring all inquiries to ArmRosGazprom (ARG), the national gas distribution company mostly owned by Gazprom. But ARG also declined a comment.

Samvel Avagian, an independent economist, suggested that the Russians will after all raise the cost of their gas delivered to the Armenian border and that its prices inside the country will likely remain unchanged at ARG’s expense. “The implication [of Arzumanian’s announcement] is that the delivery price will apparently change,” he told RFE/RL’s Armenian service.

The cost of Russian gas for Armenia 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 ARG.

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


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One Comment;

  1. Random Armenian said:

    Armenia needs alternative sources of energy, which may not meet all of it’s energy needs but at least reduce imports. This may be far fetched but what about research and development into natural gas produced by algea. This process is not able to produce natural gas in enough quantities yet but there is serious research into it. I don’t know what the realities of such research are but it could be one area that Armenia can develop.