"ARMROSGASPROM" DOES NOT SEEK SUPERPROFIT FROM GAS TARIFF INCREASE
ARKA
Jan 28, 2010
YEREVAN, January 28. /ARKA/. Armenia’s national gas operator
ArmRosGasprom has submitted an application to Armenian Public Services
Regulatory Commission (RSRC) asking it to revise upwards the current
natural gas prices as a follow up to Russian Gazprom’s decision to
raise the price of 1000 cubic meters of gas from current $154 to $180
from April, 2010.
Under the appropriate agreement, the price of gas will rise gradually
in accordance with international prices. Unlike other countries where
fuel prices rise abruptly, provision of smooth increase of prices for
imported gas allows Armenia to have guarantees from price changes s
and maintain a relatively stable situation in economy.
In accordance with an import agreement, Armenia was to pay $200 for
1000 cubic meter instead of current $154 from April 1, 2010 to March
31, 2011 inclusive. Due to the efforts of the President of Armenia
the mentioned price was reduced to $180. In 2010 the average purchase
price of natural gas will be $170 for 1000 cubic meter whereas in
Belarus today it is $186-190.
At present 600,000 families are subscribers of "ArmRosgasprom". Due
to financial-economic crisis the company registered a 20% reduction
of gas consumption losing as a result a significant part of planned
income and closed the year with losses.
"Currently average price is 246.9 US dollars in dram equivalent and
the proposed tariff is – 293.5 US dollars in dram equivalent. It
means a 19% increase given that the purchase price is to grow by
17%. A 2% difference is not a "superprofit". It is for compensation
of necessary expenses.
The difference in prices for households and large consumers is
conditioned by operational and service expenses of subscribers and the
volume of sold gas. "Particularly, 65% of total maintenance and other
cost is spent on households who consume only 36% of total gas volume.
This gas tariff exists in many countries of the world. Having large
tax-payers and investment portfolio in Armenia, "ArmRosgasprom" has
always been interested in socio-economic development of the country,
particularly in energy sector and change of tariffs was not the goal
of company.
"ArmRosgasprom" suggests that the price for consumers that use up
10,000 cubic meter of gas monthly, starting from 96 thousand drams for
each 1 thousand cubic meter up to 136 thousand drams (including VAT).
The price for services of gas supply operator will increase from
current 15.58 drams for transportation of each thousand cubic meter
of natural gas up to 47 drams. Tariff for distribution of natural gas
will increase from about 9.9 thousand drams for each thousand cubic
meter of natural gas up to more than 15.6 thousand drams. Tariff for
transportation of each thousand cubic meter of natural gas from the
current 5.3 thousand drams will increase up to 6.5 thousand drams.
CJSC "ArmRosgasprom" is a monopolist in the internal market of
Armenia. Gas enters Armenia by transit through Georgia. The company
was established in 1997. The share of Open JSC "Gasprom" is 80% in
the charter capital of the company, the share of the Government of
Armenia is 20%.