Yerevan Does Not Raise Gas Prices, Russian Publication Reports

According to the Russian publication Komersant, Gazprom managed to reach an agreement with the new Armenian authorities at the last minute regarding the increase in gas prices. For Armenia, the gas will rise by 10 percent in 2019, reaching $165 per 1,000 cubic meters. However, this agreement is formal. The price has increased for Gazprom Armenia, but Yerevan is not prepared to raise internal tariffs.

Experts believe that Gazprom may revoke the internal discount that allows its subsidiary to invest in the country's infrastructure.

It was noted that Gazprom's CEO Alexey Miller and acting Deputy Prime Minister Mher Grigoryan signed an additional agreement on December 31 for gas supply to Gazprom Armenia LLC, whereby the gas price for Armenia at the Georgian border will increase by 10% from $150 to $165 per 1,000 cubic meters starting in 2019.

The additional agreement was necessary as Gazprom had to negotiate with the new authorities regarding a contract originally signed during the previous regime.

After the revolution in spring 2018, opposition leader Nikol Pashinyan became Prime Minister, and since then, official Yerevan's relations with Russian state structures have become complicated. Last July, the State Revenue Committee uncovered tax violations in several gas companies, including Gazprom Armenia and its subsidiary Avtogaz.

Gazprom has not commented on the results of the negotiations. As Deputy Prime Minister Mher Grigoryan informed Radio Liberty on January 7, discussions regarding gas prices for Armenian consumers began between the government and Gazprom Armenia on January 8.

Pashinyan's spokesperson Arman Yeghoyan detailed in a conversation with the Russian TASS agency that there will be no state subsidies; gas tariffs will be maintained "due to internal regulations."

Andrey Polishchuk from Raiffeisenbank believes that the new arrangements between Gazprom and the Armenian authorities could lead to a reduction in Gazprom Armenia’s profits, however, this will not be critical.