The government said on Wednesday that the prices should not go up again for the next ten years if they are raised soon by public utility regulators.
The Public Services Regulatory Commission (PSRC) signaled a price rise before it was formally requested this month by Armenia’s Russian-owned gas distribution network. The PSRC said that gas mostly imported from Russia could become more expensive for Armenian households on April 1.
In a December statement, the PSRC cited the need to repay $270 million in loans used for the recently completed modernization of the Metsamor nuclear plant. It 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 regulatory body revealed that the Armenian and Russian governments have reached an agreement that commits Yerevan to providing the Hrazdan plant with $31.8 million annually for the next ten years.
Armenia - The Public Services Regulatory Commission meets in Yerevan. November 20, 2019.
In written comments sent to RFE/RL’s Armenian Service, the government said that the deal -- and the promised subsidy in particular -- will become null and void if the Gazprom Armenia operator or its parent company seeks further price hikes by 2032.
The PSRC already raised the prices of electricity and drinking water last month following a highest inflation in many years recorded in the country. Analysts say that the upcoming gas price hike will further increase the cost of living and hit vulnerable groups of the population especially hard.
In its latest application to the PSRC, Gazprom Armenia requested, among other things, an end to a more than 30 percent price discount enjoyed by low-income families. Government officials have promised, however, that the preferential tariff for the poor will remain the same.
Babken Pipoyan, who leads a consumer rights group, argued that even if the authorities honor that pledge they cannot prevent knock-on effects on the cost of other essential products.
“You can’t raise the gas price for bread producers and expect the prices of bread to stay unchanged,” he said. “You can’t raise the gas price for greenhouse owners and expect no impact on the prices of agricultural products.”
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.