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GAS FURORE IN ARMENIA
By Vahe Harutyunyan
Institute for War and Peace Reporting
IWPR Caucasus Reporting Issue #664
Nov 12 2012
UK
Government accused of covering up price hikes for Russian fuel.
In a political row over the cost of natural gas, Armenia's prime
minister has been forced to deny figures published by his government's
revenue service showing that Russia had hiked its prices by a third.
Although Armenia is heavily reliant on gas - 95 per cent of households
use it for cooking and heating - it has no reserves of its own, and
relies on supplies from Russia and Iran. The prices these suppliers
charge are thus crucial to its economy.
In 2005, Armenia was paying as little as 56 US dollars per 1,000
cubic metres, and economists say the dramatic rise since then is one
of the reasons why the country's economy is in such poor shape.
Figures released by the Committee for State Revenues show that in July,
Russian gas cost 245 US dollars per 1,000 cubic metres, up from 180
dollars at the same point in 2011. Iranian gas remained unchanged at
180 per 1,000 cu m.
When journalists and members of parliament quizzed Prime Minister
Tigran Sargsyan over the figure, he denied there had been a price
rise. He insisted that price talks were continuing but no final deal
had been reached.
Energy and Natural Resources Minister Armen Movsisyan took the same
line, telling parliament on October 24, "I want to reassure you that
nothing has changed with gas shipment prices. We are holding talks with
the Russians, and when something happens, we will inform the public,"
The revenues agency, however, stood by its data.
"The committee's figures on state revenues are based on reported
prices from companies and on reports from the tax authorities. Customs
[payment] demands are based on these statistics," Armen Alaverdyan,
the body's deputy head, told a press conference on October 25. "The
published figures cannot be wrong."
As well as being a major supplier, Russia controls Armenia's
pipelines, gas purchases and domestic sales through the ArmRosgazprom
company. Eighty per cent of the firm belongs to Russian gas company
Gazprom, while the Armenian state owns the rest.
Hrant Bagratyan, a former prime minister who is now member of
parliament deputy for the opposition Armenian National Congress,
said ArmRosgazprom's monopoly position raised many questions.
"How did it come to be that 80 per cent of shares in the monopoly
controller of the Armenian market ended up in the hands of Gazprom? So
what role does the Armenian government play?" he asked.."The Iranian
gas is used in our power stations to generate electricity which is
then sold back to Iran. Armenian consumers can only buy gas from
Russia.... All the pipelines coming into Armenia from abroad belong
to ArmRusgazprom, and hence to Gazprom. That means the Russians decide
where we import our gas from, and what price we pay. And now that the
Russians have again decided to raise gas prices, we can't do anything
about it."
Armenak Chatinyan, economic columnist for the Orakarg newspaper,
said the current set-up was bad for consumers.
"People have to buy [Russian gas] as they have no other option,"
he said. "And it isn't just about the price of gas; it also affect
public transport fares, since gas is used as fuel. It can affect the
price of food as well."
Chatinyan accused the government of trying to hide the real price by
holding it down through subsidies until the February 2013 presidential
election, when the incumbent Serzh Sargsyan is almost certain to
seek re-election.
"How come the price rise hasn't reached consumers? Why aren't we
paying more to ArmRusGazprom? Because the government is subsidising
the company so as to conceal this from the public," he said.
Vahe Harutyunyan is a freelance journalist in Armenia.
http://iwpr.net/report-news/gas-furore-armenia
By Vahe Harutyunyan
Institute for War and Peace Reporting
IWPR Caucasus Reporting Issue #664
Nov 12 2012
UK
Government accused of covering up price hikes for Russian fuel.
In a political row over the cost of natural gas, Armenia's prime
minister has been forced to deny figures published by his government's
revenue service showing that Russia had hiked its prices by a third.
Although Armenia is heavily reliant on gas - 95 per cent of households
use it for cooking and heating - it has no reserves of its own, and
relies on supplies from Russia and Iran. The prices these suppliers
charge are thus crucial to its economy.
In 2005, Armenia was paying as little as 56 US dollars per 1,000
cubic metres, and economists say the dramatic rise since then is one
of the reasons why the country's economy is in such poor shape.
Figures released by the Committee for State Revenues show that in July,
Russian gas cost 245 US dollars per 1,000 cubic metres, up from 180
dollars at the same point in 2011. Iranian gas remained unchanged at
180 per 1,000 cu m.
When journalists and members of parliament quizzed Prime Minister
Tigran Sargsyan over the figure, he denied there had been a price
rise. He insisted that price talks were continuing but no final deal
had been reached.
Energy and Natural Resources Minister Armen Movsisyan took the same
line, telling parliament on October 24, "I want to reassure you that
nothing has changed with gas shipment prices. We are holding talks with
the Russians, and when something happens, we will inform the public,"
The revenues agency, however, stood by its data.
"The committee's figures on state revenues are based on reported
prices from companies and on reports from the tax authorities. Customs
[payment] demands are based on these statistics," Armen Alaverdyan,
the body's deputy head, told a press conference on October 25. "The
published figures cannot be wrong."
As well as being a major supplier, Russia controls Armenia's
pipelines, gas purchases and domestic sales through the ArmRosgazprom
company. Eighty per cent of the firm belongs to Russian gas company
Gazprom, while the Armenian state owns the rest.
Hrant Bagratyan, a former prime minister who is now member of
parliament deputy for the opposition Armenian National Congress,
said ArmRosgazprom's monopoly position raised many questions.
"How did it come to be that 80 per cent of shares in the monopoly
controller of the Armenian market ended up in the hands of Gazprom? So
what role does the Armenian government play?" he asked.."The Iranian
gas is used in our power stations to generate electricity which is
then sold back to Iran. Armenian consumers can only buy gas from
Russia.... All the pipelines coming into Armenia from abroad belong
to ArmRusgazprom, and hence to Gazprom. That means the Russians decide
where we import our gas from, and what price we pay. And now that the
Russians have again decided to raise gas prices, we can't do anything
about it."
Armenak Chatinyan, economic columnist for the Orakarg newspaper,
said the current set-up was bad for consumers.
"People have to buy [Russian gas] as they have no other option,"
he said. "And it isn't just about the price of gas; it also affect
public transport fares, since gas is used as fuel. It can affect the
price of food as well."
Chatinyan accused the government of trying to hide the real price by
holding it down through subsidies until the February 2013 presidential
election, when the incumbent Serzh Sargsyan is almost certain to
seek re-election.
"How come the price rise hasn't reached consumers? Why aren't we
paying more to ArmRusGazprom? Because the government is subsidising
the company so as to conceal this from the public," he said.
Vahe Harutyunyan is a freelance journalist in Armenia.
http://iwpr.net/report-news/gas-furore-armenia