The national gas distribution network owned by Russia’s energy giant Gazprom requested sharper price rises last month. In particular, it sought an end to a more than 30 percent price discount enjoyed by low-income families.
In line with promises given by Armenian government officials, the Public Services Regulatory Commission (PSRC) said, however, that the preferential tariff for the poor will remain unchanged at 100 drams (21 U.S. cents) per cubic meter. The gas price for other households will rise by 3.4 percent, to 143.7 drams per cubic meter, from April 1.
The PSRC approved more drastic tariff increases for businesses, including power plants, greenhouses and food-processing enterprises. Even so, they will continue to pay less than most individual consumers.
The PSRC chairman, Garegin Baghramian, acknowledged that the nominally independent regulatory body consulted with the government before setting the new gas tariffs. He said the authorities are keen to protect the poor and support Armenian firms using gas mostly imported from Russia.
Greenhouses, which now account for a sizable share of fruits and vegetables grown in Armenia, are especially dependent on the cost of gas. Some of their owners have warned that they will struggle to remain afloat if it does go up.
The PSRC signaled impending price hikes in a statement released in December. It cited the need to repay $270 million in loans used for the recently completed modernization of the Metsamor nuclear plant. The commission also pointed to Armenia’s contractual obligation to enable Gazprom to recoup investments made in a large thermal-power plant located in the central town of Hrazdan.
The prices of electricity and drinking water were likewise raised in January following a highest inflation in many years recorded in the country. Analysts believe that that the PSRC’s latest decision will add to the rising living costs increasingly felt by Armenians.
“As if they paid us good salaries and pensions, they are now making gas more expensive,” complained one middle-aged man interviewed by RFE/RL’s Armenian Service in Yerevan.
“Of course, we don’t like it, especially now that there are no jobs,” said another Yerevan resident. “The state is wrong. It should not have raised the prices.”
International gas prices have skyrocketed over the past year. They are now much higher than Russia’s existing wholesale tariff for Armenia set at $165 per thousand cubic meters.
