ARMENIAN REGULATORS SANCTION ANOTHER GAS PRICE HIKE
Ruben Meloyan
969419.html
26.02.2010
State regulators approved on Friday another sharp increase in
the retail prices of natural gas sought by Armenia’s national gas
distribution company, ArmRosGazprom (ARG).
ARG formally asked the Public Services Regulatory Commission (PRSC)
last month to allow it to significantly raise tariffs, arguing that
the cost of Russian gas imported to Armenia will increase by almost
17 percent to $180 per thousand cubic meters from this April.
The PRSC accepted this justification, raising the gas price for
individual consumers by 37.5 percent, to 132 drams (34 U.S. cents)
per cubic meter. The price rise for thermal-power plants and industrial
enterprises will be les drastic: 17 percent.
"We have displayed a professional approach to the ARG application
within the framework of our functions," the PRSC chairman, Robert
Nazarian, said after he and other members of the regulatory body
unanimously voted for the unpopular measure.
ARG, 80 percent of which is owned by Russia’s Gazprom monopoly,
says the gas tariffs should be raised also because of a more than 25
percent depreciation of the Armenian currency, the dram, against the
U.S. dollar over the past year. Critics counter that the dram had
gained more than 80 percent in nominal value against the dollar in
the years leading up to the 2009 economic crisis and that ARG failed
to adjust its tariffs accordingly.
Karen Karapetian, the company’s chief executive, again defended the
measure after the PSRC meeting. "If there is another, more efficient
structure that can bring in cheaper gas, we can put our whole system
at their disposal," he said. "But I’m sure there isn’t."
Speaking to RFE/RL, Karapetian claimed that Iranian natural gas,
which Armenia began importing last May in modest amounts, is even more
expensive. Iranian gas is due to be converted into electricity that
will in turn be supplied to Iran. Its monetary cost is not yet known.
Karapetian also downplayed the socioeconomic impact of the gas price
rise. He said low-income households will see their monthly gas bills
rise by only between 1,000 and 2,000 drams. He again suggested that
the Armenian government compensate for that with "targeted subsidies."
The gas tariffs already rose by 14 percent in April 2009, resulting in
a 20 percent increase in the retail prices of electricity sanctioned
by the PSRC. It is not yet clear whether the electricity fees will
again go up this time around. Natural gas is used for generating
roughly one third of Armenia’s electricity output.