Natural gas consumption related total savings in 2017 may form AMD 13,4 bln

ArmInfo. All the consumers  of natural gas in Armenia starting with January 1 2017 will have an  opportunity to save  a  total  of  AMD 13, 4 bln (about USD 28 mln as  per current exchange rate), Hrant  Tadevosyan, the Director General  of Gazprom Armenia JSC  told journalists on November 25, commenting  the decision of the Public Services Regulating Commission (PSRC) of   Armenia, which  has approved  today the Company's application on  revision of the tariffs for consumers. 

According Hrant Tadevosyan, that AMD 13, 4 bln should become the  source of revenues for the  Company if the  tariff  would remain the  same. Folowing  current agreement with Georgia, 10% of all the gas  volumes supplied  is left to Georgia for the transit. According to  Director general, it is obvious that the total amount of these  volumes essentially exceeds all the international prices for gas. The  Agreement mentioned expires on January 1, 2017. Hrant Tadevosyan  expects that the new Agreement will essentially decrease the price  for transit services. We should also consider the fact that Gasprom  Armenia has implemented a number of projects at  its own  costs and   utilizing the loands. Starting with January 1, 2017 Gasprom does not  plan any large projects, particularly in respect to capital  construction. 

On November 25, the Public Services Regulatory Commission of Armenia  (PSRC) approved Gazprom Armenia's request about revision of the  natural gas tariffs for consumers in Armenia. The new tariffs will  come into effect on 1 Jan 2017.   When presenting the draft decision,  Garegin Baghramyan, Head of the PSRC Department for Tariff Policy,  said that the company's request envisages diversification of  subscribers and tariffs in five groups: 1. The subscribers having the  right to social allowances and consuming less than 600 cu m of gas  per annum will pay 100 thsd AMD per 1 thsd cu m; 2.  Greenhouse  facilities will pay 212 conventional units per 1 thsd cu m from  November 1 till March 31; 3. Processing enterprises will pay 212  conventional units per 1 thsd cu m; 4.  Subscribers consuming less  than 10 thsd cu m per month will pay 139 thsd AMD per 1 thsd cu m; 5.  Subscribers consuming more than 10 thsd cu m of gas per month will  pay 242.1 conventional units per 1 thsd cu m. Previously, Gazprom  Armenia requested the Public Services Regulatory Commission (PSRC) of  Armenia to revise the gas tariffs to prevent a decline in gas  nsumption, create favorable conditions for stabilization of the gas  consumption market, growth of gas consumption, as well as for  stimulation of the gas consuming companies' activities.  Gazprom  Armenia CJSC took into ount the expected decline in the price of  natural gas transit via Georgia. The contract on transit of natural  gas to Armenia expires in late 2016 and that a new contract should be  signed between Gazprom Export LLC (the gas supplier to Armenia) and  Georgian Gas Transportation Company LLC. Gazprom Armenia also took  into account that consumption is expected to grow due to the  reduction in natural gas tariffs for the consumers of Armenia.  Gazprom - the sole shareholder of Gazprom Armenia CJSC - is expected  to finance the possible risks. To recall, once appointed Prime  Minister, Karen Karapetyan stressed the need to revise the gas and  electricity tariffs.  He also pointed out the need to reduce the  impact of the tariffs on the vulnerable social groups, as well as to  ensure a galvanizing effect of the tariffs on business development,  specifically in agriculture and processing industry. Gazprom Armenia  CJSC is a 100% subsidiary of the Russian Gazprom and the supplier of  natural gas to the domestic market of Armenia.