Possible Reduction in Electricity and Gas Tariffs Amid Dram's Appreciation, Says Deputy Prime Minister

The Deputy Prime Minister of Armenia, Mher Grigoryan, has not ruled out the possibility of revising electricity and gas tariffs in light of the dram's appreciation.

Member of the 'Civil Contract' faction, Babken Tunyan, noted the significant appreciation of the dram recently, stating that compared to the beginning of the year, the dram has strengthened against the dollar by about 12-13 percent, and by approximately 20 percent compared to 2021.

“If it becomes clear that the exchange rate stabilizes within this range, is it possible to revisit the issue of electricity and gas tariffs? The exchange rate plays a significant role in these calculations,” Tunyan asked.

Deputy Prime Minister Mher Grigoryan responded that the influence of the exchange rate on tariffs has been calculated. “The appreciation of the Armenian dram should be included in the forecasts. The question is how permanent, fundamental, and long-term this situation is. It cannot be excluded that this is already a long-term trend, and compared to the exchange rate established in the budget or the price function, yes, this is an appreciated exchange rate. If there are no additional pressures from other components, I am confident that the Public Services Regulatory Commission will address this issue throughout the year,” Grigoryan stated.

Babken Tunyan also pointed out that when the dram depreciated, the commission was usually approached for a revision upwards after some time. Tunyan asked for clarification on whether there would be a period during which they would monitor how the situation develops and, if other conditions do not change, whether the current exchange rate is sufficient to discuss the potential downward adjustment of tariffs under equal conditions.

“Certainly. If I am not mistaken, the impact of the exchange rate on tariffs is considered over the course of the year, but there is another aspect. Ultimately, it will also matter how permanent today’s situation is, given that payment for gas can also be made in flexible foreign currencies. I believe this issue will be addressed in light of the year’s results, and the effects will be reflected in the tariffs,” Grigoryan responded.