Trouble Brewing As Russia Increases Natural Gas Prices To Armenia

TROUBLE BREWING AS RUSSIA INCREASES NATURAL GAS PRICES TO ARMENIA

Energy Tribune
June 12 2013

>From Oil Price

Armenia is bracing for a roughly 18-percent hike in the price of
natural gas imported from Russia. The unanswered question is what’s
the domestic political cost for the Armenian government?

Beginning in July, ArmRusGazProm, a joint venture between the Armenian
Ministry of Energy and the Russian companies Gazprom and Itera, will
charge customers 156,000 drams (about $374) per 1,000 cubic meters
(tcm) of gas, compared with the current price of 132,000 drams/tcm
(roughly $316), the Public Services Regulatory Commission announced
in early June. Electricity prices will increase by eight drams
(approximately two cents) per kilowatt-hour.

The gas and utility price hikes followed an earlier Gazprom
announcement that gas prices for European customers would fall by up to
10 percent to an average of $370-$380/tcm. The Commission’s decision
means that Armenians could soon be paying more for gas than residents
of Western Europe, marking a sudden reversal from previous years,
when formerly Soviet republics could expect to get a big discount
from the Kremlin. The Commission has not elaborated on its reasons
for agreeing to the price hike.

Calling for Gazprom to leave Armenia, protesters on June 7 were not
allowed to attend a Commission session at which the new prices were
discussed, Armenian news outlets reported. The gathering followed a
mini-protest on June 5 outside of the Russian Embassy in Yerevan. The
demonstrators submitted a letter of complaint to Russian Ambassador
Ivan Volynkin about the new prices. So far, the complaint has not
elicited a response.

From: A. Papazian