YEREVAN/April 1 (The Bulletin) — Gazprom Armenia has applied to the country’s Public Services Regulatory Commission to increase the price of gas that it supplies to the poorest sections of Armenian society from August, media reported (April 1).
Any move by Gazprom Armenia to increase the price it charges Armenian households for gas will be difficult to pull off. The impact of the coronavirus has undermined households’ ability to pay higher prices and Armenian society has a reputation for resisting utility price rises. In 2015 a proposed electricity price rise in Armenia led to major protests in Yerevan and an eventual climbdown.
Reports said that from Aug. 1, Gazprom Armenia wants to charge households on social benefits 36% more for their gas and to slightly reduce the price paid by other households. The overall effect would be to equal out pricing. There is no publicly available data on the number of low-income households on social benefits.
Armenian officials lined up to criticise the proposed price increase, calling it inappropriate given the probable economic impact of the spread of the coronavirus.
“Given the current situation in the global energy market, we consider it appropriate to start new negotiations on reducing the price of thousand cubic meters of gas on the Armenian-Georgian border,” Armenia’s deputy PM Mher Grigoryan wrote in a letter to the chairman of Gazprom, Alexei Miller.
The Russian side has not responded but negotiations are expected to be fraught. When Russia has previously increased the price it charges Armenia for gas, the Armenian government has said that it will switch to buying gas from its neighbour Iran with which it has built up friendly relations over the past decade.
Media also reported that Armenian PM Nikol Pashinyan had spoken to Russian President Vladimir Putin about the proposed gas price rises. He said that gas should be priced in roubles, which has fallen in value over the past month because of a slump in oil prices and the impact of the spread of the coronavirus.
“We believe that it will be more correct and logical to pay for gas in roubles,” Mr Pashinayn was quoted as saying.
ENDS
— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin
— Copyright the Central Asia & South Caucasus Bulletin 2020