ArmInfo. From January 1, 2019, the price of Russian natural gas for Armenia was increased from $ 150 to $ 165 per thousand cubic meters. But this is the price "at the entrance" to Armenia, and the internal tariff for the population has remained the same.
How long it will be kept is the subject of almost annual, very "stormy" negotiations between Moscow and Yerevan. The Armenian authorities periodically note the "constructive" approach of the Russian side, and experts believe that Moscow is not ready to lower the price. To understand the situation, ArmInfo talked to the direct participant in the negotiations - the Chairman of the Public Services Regulatory Commission (PSRC) of Armenia Garegin Baghramyan.
Mr. Baghramyan, experts and media have consistently stated that the rise in price of "blue fuel" is inevitable for the population of Armenia, the only question is how much will it rise. Yesterday the media already reported that the Russian authorities intend to increase the price of gas for Armenia by 30%, which was repeatedly hinted to the Armenian side. One way or another, the deadlines are running out, and from January 1, 2020 we can face the fact.
I am not aware of such a decision. The negotiation process is quite complicated. Yerevan made a concrete package of proposals, which is still being discussed by Moscow. In any case, the duration of the additional agreement to the contract for the supply of gas to Armenia (signed between Gazprom's head Alexei Miller and Armenian Deputy Prime Minister Mher Grigoryan on December 31, 2018 - ed. note) expires by the end of the year, and from January 1 next year it will be necessary to determine the gas tariff for the population. Indeed, from the first of January of this year, when the tariff for Russian gas at the border amounted to $ 165 per thousand cubic meters, the 5-year agreement between Yerevan and Moscow, which was based on the price of $ 150, ended. Therefore, during the Armenian-Russian intergovernmental commission, it was decided to develop a new agreement, thanks to which it will become clear to the parties how the tariff policy will be formed in the long term, and which will set the average gas price for the end consumer.
Today we have an average tariff of $ 255 (of which $ 45 is VAT), 5 groups of beneficiaries have been identified for which different price categories have been set, for example, for areas such as processing industry, greenhouse farms, a tariff of $ 211 has been set, socially disadvantaged groups of the population paid $ 100. There are countries where, for example, the price for the population is kept at a low level, but for the industrial sector it is high. It is also possible that, for example, a decision will be made to establish a single tariff for all - in the amount of the indicated $ 255.
The new agreement, as the Armenian side expects, will reflect the results of loss reduction, cost optimization and staff reduction.
In parallel, an investment scheme is being discussed in the entire gas supply system until 2030, which implies huge investments. As a result, these investments should lead to a reduction in losses, and, as a result, will prevent increase of the tariff.
- And who will pay for the difference of $ 15, formed in 2019? Could the question arise about subsidizing by the government, as it was already done in 2013, or "buying off" in the form of donation of certain industrial facilities to the Russian Federation?
- No. There should not be such a question. Gazprom Armenia continues to compensate for the difference in tariff formed as a result of an increase in gas prices at the border since January 1 of this year at the expense of domestic savings. In this context, there is no need to worry, because the state does not accumulate debts and in the future will not "owe" to Gazprom and will not be faced with the need to somehow subsidize or somehow cover the debts.
Predicting your next question - and if there were savings, why didn't you lower the tariff earlier, I'll answer that until January 1, 2019, by the agreement of 2013 ratified by the Armenian parliament and having the force of law, provisions were established that almost limited the authority of the PSRC. That is, a specific tariff was fixed, because of which, regardless of the gas price at the border, from a certain period this tariff for the end consumer will be unchanged. Based on this, the result was formed, the savings that Gazprom Armenia uses today to compensate for the difference in tariffs and does not apply to the PSRC to raise prices for the domestic consumer.
Having abandoned the restrictive provisions of the previous agreement, we hope that the PSRC, within its powers, will be able to make calculations and, based on the current methodology and, if possible, reduce the gas tariff. The new agreement will enable Yerevan, in the event of lowering energy prices on the international market, to come up with a proposal to lower prices for Armenia.
In addition, we should remember that the agreement of 2013 assumed that on the basis of the investments of the Russian Gazprom and as a result of the agreed model, the norm of 9% profitability should be ensured. To this day, the provision has not been valid due to the lack of an agreed model.
"Nevertheless, the year is coming to an end." Do you, as a participant in the negotiations see the desire of Moscow to meet Yerevan?
I can only say that we have a very constructive and friendly dialogue with Gazprom Armenia. We are waiting for the reaction of Moscow. When a decision is made, Gazprom Armenia will request a revision of the tariff for the domestic consumer; PSRC will consider it within 80 business days. Then the tariff will be determined from the date of completion of the specified 80 working days and will enter into force after 30 days.
In the absence of a new interstate agreement, if Gazprom Armenia applies to the PSRC with a request to revise the tariff upwards, a calculation will be carried out within the framework of the procedure established by the Law on Energy, and the average price will be obtained. Then, based on the current tariff policy, consumer groups and the corresponding tariff for them will be determined. If there are reasonable calculations, we can refuse to review with the aim of increasing. In any case, it must be remembered that whatever the agreement, the domestic tariff is dependent on the price at the border.