Wednesday, December 11 2013

 Armenia consumes the most expensive gas even by European standards, MP, ex-Prime Minister of Armenia Hrant Bagratyan says on his Facebook page. 

"The recent information about gas prices raises eyebrows. A.Miller, the head of Gazprom has recently said in Yerevan that from now on Armenia will receive gas at domestic Russian prices, and Russian President V.Putin pointed out that Europe buys the Russian gas for 500 USD. Armenian Energy Minister A.Movsisyan said proudly that Armenia receives gas for 189 USD and the head of the Armenian President's Administration claimed that the gas will not drop in price. Afterwards, Movsisyan said that within the next 5 years gas will not grow in price, but the debt will keep on growing (about 600 mln USD within the next 5 years).

Earlier he said that Iran had allegedly suggested 400 USD per 1000 cu m of gas.  Iran's Ambassador Extraordinary and Plenipotentiary to Armenia specified that there had been no talks with Iran and the price was out of question", says Bagratyan. 
The MP is bewildered by fact that Armenia has applied for accession to the Customs Union, domestic Russian gas prices are imposed on Armenia, there will be no reduction in gas prices, Armenia received gas for 189 USD per 1000 cu m; nevertheless, Armenia's residents are currently consuming the gas for 391 USD or 158.000 AMD. 

"In 2013 Belarus received gas from Russia for 166 USD and sold it for 155.9 USD to those having gas meters and for 3.6 USD per capita to those having no gas meters (nbnews.com.ua/ru/news/72326/; finance.tut.by/news372864.html). By the way, 1 KW/h of electric power in Belarus costs 5.5 AMD (as converted into our currency). The authorities of Belarus confess that they subsidize the retail prices of gas for the population. Anyway, in Belarus the difference between the retail prices (the gas selling prices for the population) and wholesale prices (the price Beltransgaz pays for the gas received from Gazprom) is not big", said Bagratyan. 

He says that for the moment Naftogaz receives the Russian gas (from Gazprom) for about 440 USD (the price changes on a quarterly basis. In early 2013 it was 432 USD - nbnews.com.ua/ru/news/72326/), and sells to the population for 87.8 (if consumption does not exceed 2500 cu m pr annum), for 132.9 (if consumption ranges from 2500 to 6000 cu m per annum), for 272 (if consumption ranges from 6000 to 12000 cu m per annum) and for 325 USD (if consumption exceeds 12000 cu m) (www.kyivgaz.ua/ru/nashim-klientam/czeny-i-tarify-na-gaz.html). So, the gas supplied to the population in Ukraine costs mainly 88 USD (the major part of the population consumes 2500 cu m). These are the prices of Kyivgaz. The prices are similar in other parts of Ukraine as well. By the way, electric power in Ukraine costs 13.7 AMD (if consumption does not exceed 150 KW/h monthly) and 17.8 AMD (in case consumption does not exceed 800 KW/h monthly) (www.nerc.gov.ua/?id=4787).

"In Russia gas prices vary depending on region. Regional gazproms as a rule belong to Gazprom. So, wholesale price is a relative concept there. In Saratov region the retail price is $127 for heating networks and $227 for gas furnaces (www.sargc.ru/stoimost-prirodnogo-gaza.html), in Rostov region it is $125 (http://rst.donland.ru/Default.aspx?pageid=118788). In 2011-2013 retail electric power prices in Russia made up an average of 30.3 AMD, for 2014 the minimum price is 22 AMD (Kranoyarsk region), the maximum one 40 AMD (Rostov region), the average price 30 AMD (www.fstrf.ru/tariffs/info_tarif/electro/citizens/442)."

Now in Armenia we buy gas for 158,000 AMD or $391. If we try to convert this price it to the European one (based on the calorific capacity of the gas), we will have to multiply it to 1.27. So, the European price of the gas sold in Armenia is $496. Many people say, "But we buy Russian gas for just $189. But what has this to do with us? Who cares who much ArmRusgasprom pays to Gazprom for the gas if as a result we pay even more than they in Europe do? Where is the domestic price they promised to us? And what did Movsisyan mean by cheap gas?," Bagratyan wonders.