Gas and Electricity Review: PSRC expects to lower tariffs

Photo: Media Center

The Public Services Regulatory Commission (PSRC) says it intends to reduce natural gas prices in Armenia in response to a request from provider Gazprom Armenia.

It is expected that the tariff will be lowered by about 10 drams – from current 156 to about 146 drams (33 to 30 cents) per cubic meter for ordinary users. For consumers using up to 10,000 cubic meters of natural gas a month (i.e. enterprises), it is suggested that the current price of $276.98 per thousand cubic meters be lowered to $257.56 in dram equivalents.

At last week’s government session Prime Minister Hovik Abrahamyan said that he expected reduction of not only gas tariffs, but also tariffs for electricity.

“In our research we came to the conclusion that electricity and gas prices are calculated by the logic of the old Soviet planned economy, and I cannot specify how much it will decrease, because we are busy with doing new calculations,” economist Vahagn Khachatryan, a member of the opposition Armenian National Congress (ANC) party, told media on Friday.

According to him, the proposal submitted by the public services, which stipulates that the electricity tariff might be reduced to some extent, may not satisfy the public.

“Our calculations show that we can pay 100 drams (about 20 cents) for gas instead of 156 (about 30 cents), and the electricity tariff should be measured based on that,” he said.

Vazgen Safaryan, the chairman of the Union of Domestic Manufacturers, claims that the PSRC has decided to reduce electricity tariff, based on the fact that hydroelectric power plants produced 28 percent more electricity in the first three months because the year was water abundant.

“Last year our the Metsamor Nuclear Power Plant produced 13.1 percent more electricity, and hydro power plants produced 10.7 percent, and it’s natural that changes should take place. The question is to what extend this change will be and to what extend it will satisfy the industry and the population,” he said

Economic analyst Hayk Gevorgyan believes that an important issue remains open: “Now we are discussing the issue on raising or lowering the tariff, but we need to look at the fact to what extent the existing tariff corresponds to reality,” he concluded.

Last summer, thousands of people took to the streets against the decision of the same body, according to which, the electricity tariff increased by seven drams (less than 2 cents).