Russian-Armenian agreements signed in 2013 and 2014 have made it harder for Armenian utility regulators to cut domestic prices of natural gas, Energy Minister Garegin Baghramian said on Wednesday.
Baghramian said this is why the prices did not go down after the cost of Russian gas imported by Armenia fell from $189 to $165 per thousand cubic meters in 2015. In his words, the tariff cut only translated into extra revenues for the country’s gas distribution network owned by the Gazprom giant.
The Russian-Armenian agreements prevented the Public Services Regulatory Commission (PSRC) from making gas cheaper for Armenian households and corporate consumers at the time, added Baghramian, who had worked for the regulatory body 15 years.
The minister admitted at the same time that the retail prices fell after Gazprom cut its retail tariff for Armenia to $150 per thousand cubic meters in 2016. Gazprom charges Germany and other European buyers of Russian gas more than $200 per thousand cubic meters.
A Russian-Armenian supply contract that set the current gas price runs until the end of this year. The Armenian government and Gazprom have been negotiating on a new deal.
Baghramian reiterated that the government is seeking a further drop in the Russian gas price. Yerevan also hopes that the Russians will agree to ease the pricing restrictions imposed on the PSRC, he told a news conference.
Gazprom has so far given no indications that it is ready to cut the price further or at least keep it unchanged.
The chief executive of Armenia’s Gazprom-owned gas network, Hrant Tadevosian, said on Monday that the Russian giant could actually raise the price soon. Tadevosian said that his company is operating at a loss for a second consecutive year.
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