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Seda Hergnyan

Gazprom Armenia's Rate Riddle: Utility Wants to Raise Tariff for the Needy, Lower It for All Others

Gazprom Armenia proposes to cut natural gas prices by 2.2% for consumers up to 10,000 cubic meters a month. The company's statement also contains uncertainty.

Gazprom Armenia intends to apply to the Public Services Regulatory Commission of Armenia (PSRC) for a review of natural gas tariffs charged to consumers.

According to the utility’s announcement, it intends to increase tariffs for those paying discounted rates (people receiving various forms of social assistance) - up to 600 cubic meters of natural gas per year, but at the same time reduce the price of gas sold to consumers up to 10,000 cubic meters per month. This second threshold, in fact, is of concern to the main part of the population.

Consumers who are entitled to family or social benefits are charged 100,000 drams a year for every 600 cubic meters of natural gas sold annually. The plan is to increase the rate by about 36% to AMD 135,909.6.

At the same time, it is proposed to reduce the 139,000 drams currently charged for consumers up to 10,000 cubic meters per month by 2.2% to 135,909.6.

Thus, Gazprom Armenia intends to set equal gas price thresholds. The plan is to introduce the above tariffs as of August 1, 2020. The only exceptions are thermal power plants producing electricity.

While the press and social networks in Armenia are talking about gas price increases for most of the population, based on Gazprom Armenia’s announcement, the opposite will happen.

For the most consumers, the price will drop by 2.2% since most use up to 10,000 cubic meters per month.

We must note that Gazprom Armenia has not yet officially applied to the PSRC of Armenia for approval of these rates.  

PSRC Spokesperson Liana Azizyan told Hetq that it will take awhile to study the utility’s proposal once received.

 Why the utility decided to raise gas prices for the beneficiaries of state assistance and lower them for the bulk of consumers now paying the regular rate remains a mystery.

Gazprom Armenia Press Officer Mikhail Harutyunyan told Hetq that the company does not provide any information other than that contained in the company’s statement..

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