The most that economical developments and reforms do are lead to political changes. We can prove this true sentence by using the example of our energy ministry. About ten years ago the energy minister of Armenia had more social and political power than the minister has now. Parallel to working out the energetic crisis, the reputation of the minister fell down. And after the widespread privatizations in the energetic field the authorities started to speak out about the necessity to have such a ministry. Anyway something remained the same after all these changes. The energy minister has never been a populist in Armenia. The energy minister of 1995-96, Gagik Martirosyan was doing his best to assure people that energy was a product for which people had to pay. The next ministers were trying to make everyone sure that in order to save the energetic system it had to be privatized. People know well that the energy ministers never tried to hide the reality. What’s more, they are the first to inform people about bad news. This week started with such news. The energy minister, Armen Movsisyan announced that after the gas price increase the price for energy will be increased too (by about 3-4 drams). On the base of this announcement we can conclude that the officials of the energy system and the ministry have already started to make calculations. During these last years the stable price for energy had its positive influence on our economy. I don’t mean only the fact that people got used to these prices. The production companies were sure how much resources they were going to spend on energy and they knew what kind of figures to use in their calculations. But even in this case we can’t say that the prices for energy supply have been stable and haven’t been increased since 1998. The officials and representatives of our financial and economical fields agree that the main public income in Armenia is in Armenian drams. Both the private and state salaries and pensions that are paid in drams will not be enough to cover the social expenses. And accordingly the 25 figure that is expressed in drams is insignificant. About a couple of years ago, when the exchange mark for USD was 550-570 drams, the price for 1 kilowatt of energy was 4,4 cents. This was the lowest price that has ever been paid for energy. This was the period when the system was being privatized and the existing owners and operators of the system have to take into account this figure when making their calculations now. But later something unexpected happened in our financial market. As a result of the monetary policy called “floating exchange mark” energy users started to pay more money for energy. For instance, in summer when the exchange mark was close to 400 drams for one dollar, the price for one kilowatt of energy reached 6 cents. Then during the coming years the price became stabile and it was 5,5 cents.
It is not difficult to understand that together with some other fields the energetic system “unexpectedly” got super-profit too. The head of the RAO ES Company Chubais once in his speech even petitioned the top managers of their company to study the management experience of Armenia. During a couple of years the system was getting extra profits. But this was not a result of adopting new technologies and making financial investments, but a result of the policy called “floating exchange mark”. In case the exchange mark changes for 1 cent and people continue paying 25 dram for energy, the system will get extra profit reaching 2 million dollars. Instead of this when people talk about the possible gas price increase now, the energy ministry officials do their best to prepare people for the increase of energy price too. The 12-16% increase of the price for energy will influence very badly on the financial situation of people and producers. Now we can suppose that the price will be increased in spring, when people start to use much less energy. And this is going to be the first negative result of the gas price increase. Currently there are no calculations of specialists yet as to what kind of influence such an increase will have on our economy. So it will be very interesting to learn from the experience of the countries that have already experienced such gas price increase on the part of Russia. As a result of the 80% gas price increase provided for Ukraine, both the people and producers have started to use much less gas. The gas usage in this country has cut down minimum to 10 %. Even more, this is done in winter when it is too cold there. Both in Ukraine and in Armenia a lot of people use gas to drive their cars. It is not economically effective in Ukraine any more. We can suppose that the same thing may happen in Armenia too. About one year ago the executive director of the Russian branch of our electric power stations company Evgeni Gladounchik said that usually in summer Armenia uses as much energy as any Russian city that has a population of 200.000 people. This means that we are already professional in saving energy. We will become professional also in using water and gas this year. But it seems that the leaders of these fields have already found the solution and they are going to increase the prices.
