The price of water for households and corporate consumers in capital Yerevan and nearby areas may be increased by more than 14 percent in July after a utility company has requested such a tariff change from the public services regulatory body.

If approved, the price increase will come as an additional burden on residents and businesses that will also have to pay more for natural gas beginning next month.

Water will cost about 54 cents per cubic meter, up by 7 cents on the current rate.

Gagik Margaryan, commercial director of Yerevan Jur CJSC, which supplies water to customers in Yerevan and 31 nearby villages, says that the increase in the water tariff is in no way connected with the 37.5 percent rise in natural gas tariffs effective April 1.

“The rise in water tariffs always depends on four factors – electricity, inflation, the national currency (dram) exchange rate against the Euro and the amount of water consumption. Since electricity prices do not change, this 14.3 percent [rise] was formed on the basis of the other three factors. Armenia has an inflation according to official data, the Euro exchange rate fluctuates and water consumption is falling,” Margaryan explained.

(The French-run company managing Yerevan’s water distribution says it imports equipment for upgrading the local networks from European markets).

The company’s water supply in 2009 amounted to 362.8 million cubic meters, which was a 2.5 percent decrease over the previous year. In 2010, it expects to supply 345 million cubic meters, which will be a further 4.9 percent drop.

Margaryan also presented data according to which 18 large companies reduced their total water consumptions by 4-5 million cubic meters compared to the previous year, which was connected with the effects of the global economic crisis felt in Armenia during 2009.

The water utility’s representative does not expect, however, that the rise in water tariffs will further reduce water consumption. Rather, he expects, the additional expense will be reflected in the cost of production.