How is it that the dollar is depreciating while diesel fuel is becoming more expensive? The Competition Protection Commission presents the numbers

The Competition Protection Commission has addressed the recently discussed issue on various platforms regarding why, against the background of the depreciation of the dollar, the price of fuel imported into Armenia not only does not decrease but also increases.

In March 2022, the price of one liter of diesel fuel in Armenia was 563 drams, in April it was 612, in May it rose to 662, and in June it reached 670 drams.

The Commission studied the issue and found that during the period from January to May 2022, the cost of importing one liter of diesel fuel into Armenia increased by 52-57 percent, while the dollar exchange rate decreased by 4-6 percent during the same period. Against this backdrop, the retail price of diesel fuel rose by 32.4 percent, reaching 662 drams per liter.

The Commission also examined the dynamics from June 2021 to May 2022 and found that the import cost of diesel fuel increased by 72-76 percent, with the dollar exchange rate dropping by 6-8 percent. As a result, the selling price of diesel fuel increased by about 44.86 percent, rising from 457 drams in June of last year to 662 drams in June of this year.

It is worth noting that the Governor of the Central Bank stated at a press conference on June 14 that inflation in Armenia could have been much higher if the dollar exchange rate had not decreased and the dram had not appreciated. According to the Central Bank leader, this factor helped prevent the high inflation recorded in the international market from being reflected in Armenia similarly.

He noted that due to the depreciation of the exchange rate, domestic prices in Armenia did not rise to the same extent as in the global market. For this reason, the Central Bank is currently refraining from exerting any pressure on monetary policy and is monitoring economic processes to intervene if necessary.