Gas Price Increase Application Possible, Says Garen Baghramyan

Garen Baghramyan, the chairman of the Public Services Regulatory Commission, stated to Lragir.am that there is a possibility that "Gazprom Armenia" will submit an application to the Commission to increase the gas price for consumers. He noted that the announcement regarding the gas price not being increased pertains only to the gas sold at the border, but this does not mean that "Gazprom Armenia" cannot submit an application to the Commission.

When asked if the application was solely for the purpose of an increase, the Commission's chairman replied: "The price at the border has increased by $15, while in terms of calculations, it has risen by $30 because Gazprom has absorbed about $15 at the existing tariffs. This means that the current prices are conditionally based on a border price of $135. Today, we are talking about the fact that the calculated border price has already risen by about $30."

It is worth recalling that at the end of 2019, information emerged that "Gazprom Export" LLC and "Gazprom Armenia" LLC signed an additional agreement on the supply of Russian gas, according to which the price of gas sold to Armenia would not change and would remain at the 2019 level in 2020. The price of Russian gas sold to Armenia had increased at the border at the beginning of 2019, set at $165 per 1,000 cubic meters, up from $150 prior to that.

When the border gas price increased in 2019, government members announced that the price for domestic consumers would not rise. Prime Minister Nikol Pashinyan stated that due to certain internal regulatory measures, there would be no change in the gas price for Armenian consumers. Throughout 2019, there was no change in consumer prices, with government members stating that the absence of a price increase was due to internal savings at Gazprom.

Regarding whether the government is still negotiating with "Gazprom Armenia" to avoid a price hike for domestic consumers, Baghramyan responded: "Of course, we are negotiating. In 2019, we achieved a situation where there was no increase, but I do not rule out that there may be one now." When asked if it is not possible to continue financing the increase through internal resources, he replied: "Based on the contract from 2013 to 2018, when the commission was not conducting any activities, but was forced to impose tariffs through agreements, there were accumulated funds and savings, which made it possible through negotiations. Discussions continue, but this cannot last forever."

Garen Baghramyan added that there is no application yet, but it cannot be ruled out that one may come. As for how much the gas price for consumers may increase, he stated that it is impossible to say at this time.