ARMENIAN NATIONAL CONGRESS REP.: ARMRUSGASPROM SHOULD UNDERSTAND THAT THE HIGHER IS GAS TARIFF THE LOWER IS CONSUMPTION

ArmInfo
2010-02-24 17:55:00

ArmInfo. ArmRusgasprom should understand that the higher is the gas
tariff the lower will be its consumption, says Vahagn Khachatryan,
a member of the opposition Armenian National Congress.

"Endlessly rising the tariff just relying on solvency of consumers
means biting the hand that feeds you. The government explains that
gas tariff has been increased even in Belarus. Such explanations are
baseless and negligent. The government accepts any explanations for
the rise of the gas tariff with apathy. The problem is that there is
no effective institute of public opinion in out country. The National
Forum of Trade Union in Ukraine has recently stopped the rise of
gas prices. One can hardly ever imagine such thing in Armenia,"
Khachatryan said. He believes that gas tariff may be increased to
legalize the financial flows for maintenance of shady economy. The
three-year investment program of ArmRusgasprom allows such conclusion.

"Expenditure items are extended at the expense of the work which
is actually carried out by the population. There are no capital
expenses because consumers pay even for the gas pipes laid up to their
apartments. I cannot understand how can they speak of social mission
buying gas for 180 if not for 154 dollars per 1000 cu m and reselling
it to the population for 350 dollars. Let’s suppose the gas tariff was
increased, the government should at least think of subsidies to the
low-income population. However, the subsidies should not be like those
in 2005-2007 when the government paid for subsidies with the waning
share in the capital of ArmRusgasprom Company," Khachatryan said.

To recall, the price for natural gas in Armenia starting April 1,
2010, will increase from $154 to $180 per 1 cub m. According to the
application, submitted by ArmRusgazprom CJSC to the Public Services
Regulatory Commission, it is offered to increase the tariff for
subscribers, consuming less than 10,000 cub m of gas per month, from
96,000 to 136,000 per 1000 cub m, while it is offered to calculate the
tariff for subscribers, consuming over 10,000 cub m, by the formula
256 Å … drams (E – dollar rate by CB as of the 25th day of the month
preceding the assessment one). The current formula makes up E x 215.

In January, ArmRusgazprom CJSC submitted an application to PSRC for
revision of gas tariffs. "The proposed tariffs are much lower than
those required to assure the existing level of development of the gas
transmission system and compensate all the economically justified
expenses. However, even in these conditions, the tariff may become
a load for consumers. Nevertheless, the process of price formation
is an economic category, and the cost of the service being provided
cannot be lower than its actual cost a long time. In conditions of
the current tariffs, the established average tariff makes up $246,9
in dram equivalent, and in the supposed – $293,5 in equivalent, or
about 19% increase in case of 17% growth of the purchase price. So,
2% difference cannot mean ‘surplus profit’, it just aims to reimburse
the required expenses, less regard to the fact that the value added
tax is transferred to the state budget from the sale price", the
company message says.