The wholesale price has stood at $165 per thousand cubic meters since January 2019. It was well below international market-based levels even before they reached record highs this year following the Russian invasion of Ukraine.
The government reported on Thursday that the tariff will remain unchanged at least until 2033 under the terms of a Russian-Armenian agreement reached in July.
It said that the deal also commits the Armenian side to honoring a 2013 contractual obligation to help Russia’s Gazprom energy giant recoup investments made in an Armenian thermal-power plant. Yerevan will specifically pay Armenia’s gas distribution network owned by Gazprom about $35 million annually over the next ten years.
According to Suren Parsian, an Armenian economist, this arrangement is the result of “quite difficult negotiations” conducted by the governments of the two countries.
“When a Russian-Armenian agreement on gas supply was signed in 2013 the Armenian side pledged to ensure the profitability of the Fifth Unit of the Hrazdan power plant,” Parsian told RFE/RL’s Armenian Service. “But it failed to ensure that profitability.”
Armenia imports more than 2 billion cubic meters of Russian gas annually, meeting more than 80 percent of its demand.
Although the wholesale Russia tariff remained unchanged, Armenia’s energy regulator raised in March this year the retail prices of gas by an average of 4 percent. It too cited the need to honor Yerevan’s contractual obligation to Gazprom.
Parsian suggested that the domestic prices could rise further in the coming months or years despite the latest Russian-Armenian agreement.
“Gazprom-Armenia [operator] plans to invest around 60 billion drams ($152 million) in our gas distribution network over the next four years,” he said. “That could certainly affect the gas tariffs.”