Gazprom Co Dossier insists on raising gas prices for Armenia in 2013

Interfax, Russia
Dec 13 2012

Gazprom Company Dossierinsists on raising gas prices for Armenia in 2013


Gazprom (RTS: GAZP) insists on raising natural gas tariffs for Armenia
in 2013, Armenian Energy and Natural Resources Minister Armen
Movsisyan told journalists on Thursday.

Negotiations between the ministry and Gazprom are still ongoing.

“The new gas price will be announced by the end of the year,” he said.

At the end of this year or beginning of the next, the Public Services
Regulatory Commission of Armenia (PSRC) will review the investment
program of the sole gas supplier to Armenia – CJSC ArmRosGazprom – for
2013-2015 and evaluate the influence that investments will have on the
tariff, head of the investment department at PSRC Abgar Budagyan told

As reported, ArmRosGazprom is planning to invest $88.4 million in the
next three years.

Armenia currently procures gas from Russia at $180 per 1,000 cubic
meters. The last time Russian gas prices to the country were increased
was on April 1, 2010 – from $154 to $180 per 1,000 cu m. For the
Armenian population, prices rose from 96 to 132 dram per cubic meter,
and for major producers that use more than 10,000 cu m a month, the
price increased from $215 to $243.13 per 1,000 cu m.

Expensive gas has caused Armenian citizens to think about whether or
not they really need it.

Ashot Ovsepyan, the director of LLC AEG Service, which holds the
monopoly on servicing in-home gas supply systems in Armenia, told
Interfax that natural gas consumption is on the rise not because of
the population, but because of other groups of consumers. The number
of natural gas consumers in the country has experienced practically no
changes in the last several years, he said.

“We stopped at 587,000 users, and we almost aren’t growing any
further,” Ovsepyan said, noting that many Armenian residents are not
using gas supplies, especially in rural areas. Instead, they are
starting to heat their homes with firewood or cow manure because it is

Another hike in gas prices, which is expected to occur next year,
might result in a certain limitation on consumption, and in several
cases it might even cause people to stop using gas, Ovsepyan said.

On December 12, PSRC decided to reduce the tariff for technical
servicing of in-home gas equipment for ArmRosGazprom users starting on
July 1, 2013. In particular, the tariff for servicing one gas
appliance has been set at 2,270 dram a year, including VAT, as opposed
to the current tariff of 2,400 dram. For servicing two gas appliances,
the price will be 4,540 dram instead of 5,700 dram, and for three or
more – 6,810 dram, instead of 6,900 dram.

Ovsepyan noted that the PSRC’s decision will worsen AEG Service’s
financial position and that the company cannot count on profit next
year. The company will also need to resolve the issue of its survival
and of staff retention.

In January-September 2012, Russia boosted natural gas deliveries to
Armenia by 24.3% to 1.323 billion cubic meters (bcm), and 1.128 bcm of
natural gas were sold (12.3%).

ArmRosGazprom, 80% of which belongs to Gazprom and 20% of which is
owned by the Armenian government, holds the monopoly on gas supplies
to Armenia.

The official exchange rate on December 13 was 405.98 dram/$1.


From: Emil Lazarian | Ararat NewsPress

Emil Lazarian

“I should like to see any power of the world destroy this race, this small tribe of unimportant people, whose wars have all been fought and lost, whose structures have crumbled, literature is unread, music is unheard, and prayers are no more answered. Go ahead, destroy Armenia . See if you can do it. Send them into the desert without bread or water. Burn their homes and churches. Then see if they will not laugh, sing and pray again. For when two of them meet anywhere in the world, see if they will not create a New Armenia.” - WS