In a move stemming from the decreased cost of Russian natural gas supplied to Armenia, state utility regulators approved on Tuesday a 6 percent reduction in the retail gas price for Armenian households and small businesses.
Russia’s Gazprom monopoly lowered its wholesale gas tariff by 9 percent, $150 per thousand cubic meters, nearly two months ago. The price cut was formalized during Russian Prime Minister Dmitry Medvedev’s visit to Yerevan.
The Armenian government requested a deeper discount early this year, citing the collapse in international oil prices. Gazprom’s market-based tariff for European countries has plummeted from an average of $350 to below $200 per thousand cubic meters in the last two years, making the Russian discount for Armenia much less significant.
The Public Services Regulatory Commission (PSRC) lowered the domestic tariff for individual consumers from 156 drams to around 147 drams (30 U.S. cents) per cubic meter. The measure was formally requested by Armenia’s Gazprom-owned gas distribution network in late April.
The price cut will take effect on July 1, meaning that the Gazprom-Armenia operator will earn an estimated 9 billion drams ($19 million) in extra revenue by that time. Gazprom-Armenia’s chief executive, Vartan Harutiunian, said the company will use that money to refurbish some of its outdated gas transmission and distribution facilities.