What is the Reason for the Unprecedented Rise in Gasoline Prices? Analysis

Recently, there has been an unprecedented rise in gasoline prices at gas stations in Armenia. Currently, gasoline is being sold at 1.35 dollars per liter. In stark contrast, the price of liquefied gas has dropped to 100 drams per liter, whereas it sometimes reached 240-250 drams. This information was reported by panorama.am.

Experts link the increase in gasoline prices to the Russian market, where it has also seen unprecedented hikes, setting new records. Specifically, the price of AI-95 gasoline has risen to 69,925 rubles per ton (approximately 280 drams per liter), while fuel oil has increased to 35,453 rubles. AI-92 gasoline has also risen to 62,434 rubles per ton (about 250 drams per liter). The price of summer diesel has increased to 67,848 rubles per ton (around 270 drams per liter). Since the second half of August, this marks the twelfth record increase for this type of fuel, and the rise has continued for four consecutive quarters.

Notably, liquefied natural gas has also become more expensive in Russia, reaching 28,957 rubles per ton (about 115 drams per liter), while the opposite trend is observed in Armenia. The fact is that unlike the gasoline market, where 5-6 companies dominate and it is primarily imported from Russia, the import of liquefied gas involves 86 companies in Armenia, with the largest holding a maximum share of 10%. Additionally, liquefied gas is imported not only from Russia but also from Iran.

Besides the dominance of certain companies over gasoline prices, two other factors also have an impact: the global oil prices and the exchange rate of the Armenian dram against the dollar. However, global oil prices are on the decline, and the dram appears to be stable against the dollar. Therefore, the rising gasoline prices can be attributed solely to the Russian market, indicating a non-diversified external market for Armenia and domestic monopolization.