The RA government and “Gazprom Armenia” are starting a new round of negotiations

The government of Armenia and “Gazprom Armenia” are starting a new round of negotiations from today.

On the agenda is the topic of Russian gas, which has become more expensive at the border since January 1, and its effect on the pockets of Armenian consumers. Bilateral discussions may last months, Acting Deputy Prime Minister Mher Grigoryan predicted in a conversation with “Azatutyan”. Negotiating on behalf of the executive, Grigoryan also mentioned that until there is a clear decision, “Gazprom” will not apply to the Public Services Regulatory Commission to revise the tariffs.

“There is a clear agreement that the matter should be studied in detail. And everything should be done so that the tariff does not increase,” Mher Grigoryan said in a conversation with “Azatutyan”.

As a result of several months of negotiations, Russia increased the price of gas supplied to Armenia, announcing on December 31 that in 2019 it will increase from $150 to $165 per 1,000 cubic meters. Who will bear the burden of the difference of 15 dollars is still unknown, but the acting deputy prime minister believes that everything should be done so that the tariff for the consumer does not increase. Now Armenian consumers pay 286 dollars for 1000 cubic meters of gas. According to Mher Grigoryan, at this stage of the negotiations, the efficiency and cost structure of “Gazprom Armenia” works will be discussed, studies will be carried out in the Russian company.

“The more effective work of the company and the reduction of unnecessary costs are also in the interests of the Armenian Gazprom. According to that, readiness has appeared,” said the acting deputy prime minister.

As a result of long-term studies, it is planned to investigate the amount of damages suffered by “Gazprom”. Gazprom Armenia Director Hrant Tadevosyan announced in November of last year that the Russian monopolist company has been suffering losses of 13.4 billion drams annually for two years.

“Azatutyut” asked Grigoryan whether “Gazprom Armenia” is ready to leave the gas tariff unchanged despite these losses and the increase in the price of gas at the border. Acting Deputy Prime Minister responded: – “The structure of damages and the cause of damages should be deeply studied in order to understand what are the correct ways of optimization so that damages are not generated. I think it can be done, after all the average tariff is quite different from the border price. Accordingly, I think there are opportunities to fit in the margin.”

If “Gazprom” has problems with pricing, it is possible to apply to the Public Services Regulatory Commission to raise the tariff, economist Artak Manukyan does not rule out this development scenario either. The Prime Minister’s adviser on economic issues claims that long-term solutions are needed to prevent unwanted consequences. – “It should be noted that there are ways to increase efficiency in “Gazprom Armenia”, these are the losses, there are enough investment efficiency directions, related to purchases. All of these are influencing factors to offset that potential gas price increase at the border in the short term. However, more strategic and long-term solutions should be sought.”

Vahe Davtyan, an expert on energy issues, is also convinced that it is possible to reduce the gas tariffs within the country by 25 percent, but until then, he fears that the scenario of 2013 will be repeated and the state will accumulate debts due to not increasing the tariff. In 2013, in exchange for that debt, Armenia handed over 20 percent of the state’s share to Russia and “Hayrusgazprom” became “Gazprom Armenia”.

“Risks can first of all be expressed in the fact that certain infrastructures or generating facilities will be transferred to the Russian side in order to pay off the new debt, or they will take place in the form of certain political concessions,” commented Davtyan.