U.S. Ambassador: U.S. comes out for transparent deal on gas price between Armenia and Russia

 The USA is not involved in the negotiations between Armenia and Russia for the gas tariff. However, given the wide public response to the issue, the United States comes out for transparency of the upcoming deal, U.S.  Ambassador to Armenia John Heffern told media on May 22.  In this context, the diplomat said, diversification of energy sources is extremely important for avoiding price hikes. The diplomat urged the Armenian authorities to use renewable energy more actively to diversify the
energy sources and upgrade the energy security.

As for the Government's intention to subsidize the upcoming rise in the gas price by 30%, the ambassador said that the executive power should adopt the given decision in cooperation with the legislators and the people. Journalists asked the ambassador if the rise in the gas price is Russia's pressure on Armenia. John Heffern parried the question saying that Armenia and Russia are partners.

To recall, Minister of Energy and Natural Resources of Armenia Armen Movsisyan said in an interview with the local Shant TV overnight that upcoming rise in the gas price in Armenia may lead to a 30% rise in the electric power tariff in average.

The minister said that gas is a significant component in the electric power cost value. Therefore, a price hike is inevitable. TPPs generate 42% of totalelectric power generation in the country. The regulatory body is currently making more precise calculations and the final price will be announced later depending on the new gas price, the minister said.  Movsisyan explained that the electric power price for consumers has not been changed for a long period of time despite the rise in prices of fuel, materials, foreign exchange rate fluctuations and other factors. He added that gas price for the population will rise by some 20% and for corporate consumers - by 15%. However, negotiations with Gazprom OJSC are not over and the final tariff may be more moderate.

Following the rise of the Russian gas tariff for Armenia from the current $180 per 1,000 cu m to $270, ArmRusgasprom applied to the Public Services Regulatory Commission for increasing the gas tariff for the population by 67.4% - from the current 132,000 drams to 221,000 drams per 1000 cu m, and for the large consumers by 61.3% - from $243 per 1000 cu m to $392.

Since April 1 2009 Electric Networks of Armenia CJSC, which is also a Russian asset, has been selling electric power to the population at the daily tariff of 30AMD per kWh and night tariff - 20AMD per 1kWh.  Tariffs for the other final consumers are  17- 30 AMD/kWh. (The exchange rate of the Armenian Central Bank for May 21 was 417.08 AMD/1 USD).