Spring is in the air, however, Armenians still have no clue as to what will happen with the gas price. Based on the fact that the RA Committee on Regulating Public service should notify the population of a gas price increase three months prior to the actual increase, we may assume that the gas consumers of Armenia will pay the same price until summer. The Deputy Chairman of the committee, Nikolai Grigoryan, said that the price will be increased, but no one knows exactly what the price will be.
According to Grigoryan, we do not have the right to blame Russia for raising the price of the gas provided to Armenia, because $110 is the market price. “In fact, our citizens don’t think the price is high, they just say that their pockets are empty- fill our pockets and we’ll pay.”
“Filling pockets,” as we see, is considered a responsibility, but that is not a burden on the authorities’ shoulders.
In terms of the “moral, psychological” aspect of the issue, and the substantive gas price increase, there is one question which everyone either doesn’t want to answer or doesn’t give a complete answer. How is it that the Russian gas comes to Armenia through Georgia at the price of 54 USD for 1,000 cubic meters but in Armenia “Arm Rus Gasard” provides that gas to the Armenian consumer at $110 USD (59,000 AMD) -2.5 times more? They say it’s because of taxes and other expenditures. However, it is very difficult to explain a 150% increase in the price. We may draw two conclusions here- either “Arm Rus Gasard” receives super profits, or “Gasprom” tries to prove the current price is much lower than the market price. We have already mentioned the opinions of RA Minister of Energy Armen Movsisyan and Karen Tchmarityan, RA Minister of Trade and Economic Development. Let’s recall that, according to Movsisyan, if the price goes up to $110, the price for electricity will be increased 3-4 AMD. Grigoryan also agreed with that idea. He announced that they have done calculations for the prices of 70, 90 and 110 USD and found that electricity will be at minimum 3 AMD.
The Central Bank of Armenia also drew its attention to the possible gas price increase in terms of inflation. According to CB experts, there will not be too much influence. Thus, the 3% inflation plan for 2006 will not change much. The CB also thinks that people will see the changes in 2007 as well.
Let’s recall that Meruzhan Hakobyan, Adviser to the RA Minister of Trade and Economic Development, does not quite share this opinion. He thinks that an increase in the gas price will have significant influence on the energy consuming branches of industry.
According to economist, Edward Aghajanov, the prices will increase by 10-15%. The economist comments that, based on the “peculiarities” of the Armenian market, when the price of one service or good goes up, they also have an impact on other products. Gas, natural gas, diesel, electrical power, and wheat are the main products, which serve as examples.
Many Russian experts try to explain the Russian policy with the fact that the Russian Federation would not raise the gas price without any serious reason, because many other Russian companies operate in Armenia and they will also suffer.
Indeed, according to Tigran Davtyan, Deputy Minister of Trade and Economic Development, there are currently about 500 companies that have Russian capital in Armenia. However, the main company which is mostly used as an example by the Russians- “RAO EES,” to which most of the largest systems belong- HES of Hrazdan- will hardly have any loss. If companies producing other goods may have issues with competition in the event of a price increase, the product of HES of Hrazdan, electrical power, is out of competition. The increase of the electricity price will be by 3-4 AMD and will hardly have any essential impact on the volumes of consumption.
One way or another, we don’t have much to do but wait and see whose predictions come true. And the negotiations of the “strategic partners” are still continuing. At least that is what they say.