“ArmRusgazard” pays $110 to Russia for one cubic meter of natural gas starting from April 1. In several days a new price will be applied on natural gas for Armenian consumers. But it is not clear yet what the price will be and what kind of results it will have.
Armenian consumers now will have to pay 90 dram instead of 59, in case of using less than 10.000 cubic meters. Though the price for consumers using more than 10.000 cubic meter gas is cheaper, it is still twice more from the price we used to have before that (79,1 – 146,51). This multiple increase of gas price will impact the energy production most. Besides big companies, as well as gas stations use more than 10.000 cubic meter gas per month. This means that the gas for transport vehicles will increase almost twice (mini vans, buses, taxi cars, etc.). Now it turns out that after gas price increase as well as the prices for taxi and transport services will be increased as well. Currently the average salary is about 50.000 dram in Armenia. If the prices for mini van transportation services increase (definitely it will increase for 50 drams), people will have to spend more money on transportation covering more 4-5% of their salaries. This is not little money, moreover, if we take into account the fact that 80% of passenger transportation in the city is done by mini vans. We don’t know yet what the new price will be. Anyway we tried to find it out and asked the transportation department of Yerevan city administration office. Our question was the following: “What kind of influence will the gas price increase have on the prices for mini van transportation?” Please pay attention to their answer: “Who said that the gas price will be increased?” We said that everyone knew about that, but they asked us whether we had a relevant decision or not.
Later we informed them that the text of that decision had been shown on different T.V. channels several days before that. According to the mentioned official, who didn’t want to present himself, their specialists hadn’t made any calculations yet and had not presented any applications to “Yerevantrans” company.
Actually everyone, as well as the head of the Central Bank, still hopes that a new lower price will be fixed. This is the reason why no one wants to make any calculations.
Now let’s speak about another interesting fact. Currently “ArmRusgazard” sells 1000 cubic meter of gas to gas stations for $79,1. Our calculations show that gas stations pay 36 dram to “ArmRusgazard” for one cubic meter of gas. Gas stations sell gas at a price that is four times more than the price they pay for it: 130 dram. According to specialists of this field this difference is not justified. As for gas stations, they say that this price is defined by the taxation law. Currently gas stations are taxed by the relevant law of defined taxes. Each gas station pays 1,5 million dram per month for each gas insertion point. Probably this is the reason why always there are queues not far from gas stations, because they don’t want to have more insertion units in order not to pay more 1,5 million dram each month (about $3000). By the way, about four years ago this sum covered 500.000 dram, but later it was increased slowly.
So is the taxation legislation the reason why consumers pay higher prices? Shouldn’t this law be amended? A high ranked official representing the RA taxation board informed us that they were not going to take any steps to change anything until the final price is defined. It is worth also mentioning that almost all drivers using natural gas say that gas stations always insert 10-15% less gas than they have to. According to specialists most part of this field is under shadow. This field is very profitable and usually these businesses are backed by powerful personalities.
In other words no one wants to make any predictions yet. As for gas stations, they don’t say anything about the possible prices. There are rumors saying that the prices for mini van transportation will be increased up to 150 dram per person, but it is not defined yet. Several days ago, regarding the final price the prime minister advised people to wait another 15-20 days. But the price for the supplied gas will be increased by that time. So when are they going to fix the new price? Are they going to do this on April 10? In spite of these businesses, the mini van transportation companies have to first apply to the municipality to fix a new price, but this will take some time. So if the prices are not fixed by April 10, people will be faced with a very bad situation. Probably the authorities have foreseen this too. Probably this issue will develop according to one of the following scenarios.
The new price defined by April 10 will be lower like Serj Sargsyan has promised. In this case the problem is that the Public Services Regulatory Commission will have to reduce the price, while according to the existing law it has to stay in force minimum for six months. The second scenario is that the transport companies have already applied for defining a new price but they keep this information a secret. And the third scenario is that the new price will be applied as of April 10, but the transportation businesses will not be allowed to increase the prices until they “make some certain decisions and decide what to do”.
Anyway, everything will be clear very soon. One thing is clear for sure: the authorities will do their best not to let people suffer much from the consequences. But the reason is not that they like the people a lot, but that this will make people disappointed and will serve as a firm basis for the opposition to act. In any case, people are getting more disappointed in the possible increase, especially pensioners and the other low-class groups of our society.