Pashinyan and Putin Discussed the Price of Russian Gas for Armenia

By Ani Paitjan

Prime Minister Nikol Pashinyan held a phone conversation with Russian President Vladimir Putin. According to Armenia’s government, they discussed issues related to the supply of natural gas to Armenia.

No further details were provided on the issue. 

A gas price hike has become a worrying issue for Yerevan since the coronavirus pandemic.

Recently, Deputy Prime Minister Mher Grigoryan wrote a letter to Gazprom (Russian gas supplier to Armenia) Chairman Alexey Miller, proposing that both sides start negotiations on the matter. Grigoryan argued that it was time to start a new round of negotiations on changing the price of gas supplied to Armenia, since economic disruptions caused by coronavirus will significantly reduce energy consumption levels in Armenia.

Armenia imports more than 80% of its gas from Russia. At the beginning of 2019, Russia increased the price of gas to Armenia by 10%, from $150 to $165 per thousand cubic meters.

Despite that price rise, the cost of gas supplied to Armenian consumers remained unchanged.

Before the negotiation process proposed by Armenia to decrease the gas price, Gazprom Armenia, the Armenian subsidiary of Russia’s gas giant Gazprom, applied to the Public Services Regulatory Commission with a request to increase gas tariffs for consumers from July 1.

Currently, households entitled to social benefits are charged $200 a year for 600 cubic meters of natural gas annually. Gazprom Armenia’s plan is to increase the rate by about 36%, which means that some Armenian consumers will be charged around $270 instead.

At the same time, the company is proposing to reduce the $277 currently charged for consumers for 10,000 cubic meters per month by 2.2% to $270.

Armenia and Russia have begun talks on gas prices. Negotiations are not over yet, but time is of the essence, as the coronavirus pandemic is damaging the world economy as well as collapsing oil and gas prices.