Liquid Gas Prices Rise in Armenia: Economist Explains

In the past week, the price of liquid gas in Armenia has increased by 20-30 drams. Economist Suren Paryan stated that Armenia is an importing country for liquid gas and does not produce it.

“Armenia primarily imports liquid gas from Russia, and also partially from Iran and Iraq. When objective and subjective reasons lead to issues at the Upper Lars checkpoint, it directly affects Armenia. There are often instances of speculation, meaning importers, seeing the Upper Lars checkpoint closed, significantly raise the price of liquid gas in the market, creating a certain panic,” Paryan told Aysor.am.

He noted that Georgian border guards regularly create issues for our importers and exporters, specifically leading to additional costs for LPG importers at this time, which directly affects transportation costs of the trucks, influencing pricing as well. The Georgian side imposes unplanned additional financial burdens on importers, which should be reflected in price increases,” he added.

The economist pointed out that currently, gas prices in the liquid gas market are volatile and mixed: “Sometimes even the prices are below the cost price, but the overall logic is that Armenia should try to diversify its import options and reduce dependence on Upper Lars. This is the main problem we should try to solve.”

When asked if it would be possible to import liquid gas through Azerbaijan like wheat, Paryan clarified, “Yes, it is possible to bring it in. But, considering that the wheat has been brought through Georgia, it again makes no sense. If we are bringing from Russia, then we should try the Russia-Azerbaijan-Armenia route, for example ensuring imports through Kazakh and Ijevan. In that case, efficiency will increase, as Armenia will clearly have an alternative.”

Regarding certain speculative actions by market players and state oversight, Paryan noted that the Competition Protection Agency considers this market competitive: “They mention that there are over 100 importers in the market, hence they have nothing to do in the market. They are moving on that logic.”

As for gasoline prices, the economist added that there is currently no change: “At this moment, global oil prices have decreased, which could have some effect on our imported gasoline, but the specific price of imported oil has a very small impact on the cost price of the gasoline. Transport costs, taxes, salaries, and other charges have a much greater effect.”