ArmInfo. According to energy security expert and political scientist Vahe Davtyan, the containment of electricity tariff in Armenia is only temporary.
In his Facebook post, the expert notes that in recent years, due to the strengthening of the Armenian dram, Armenia has accumulated approximately 20 billion drams in free funds from natural gas purchases annually. "As of August of this year, this surplus, according to my information, reaches 40 billion drams. Obviously, these funds can become the basis for reducing gas tariffs in the country. However, the authorities decided to take a different path. In 2024, a decision was made not to reduce gas tariffs, and the aforementioned accumulated funds are directed to the construction of new gas infrastructure in Yerevan, while this should have been done through the payments for connecting new subscribers. These funds, naturally, continue to accumulate, and in July 2024, the PSRC decides to allocate part of these funds to the construction of a new gas pipeline in Kirants, which also finds no solution. And so in December 2024, by a decision of the PSRC, about 13 billion drams from this accumulated amount were allocated to cover the deficit in the electricity tariff. By the same decision, the gas tariff for thermal power plants is set at an illogically low level of $46 per 1000 cubic meters, and the remaining difference is subsidized from the above-mentioned amount. The question arises: where did this tariff deficit come from and how did it arise?" Davtyan questions.
The problem, he says, lies in external energy policy. In 2024, Armenia imported less gas from Iran than was stipulated in the contract, resulting in a deficit of 13 billion drams in the 2025 tariff. And, as in all other cases, instead of directly addressing the issue and seeking solutions, the authorities are keeping silent about it, preferring to subsidize electricity tariffs without any economic justification. The situation is further complicated by the current rules of the liberalized electricity market. In particular, consumers who entered the market as a result of liberalization pay less for electricity than before, while producers who entered the market sell it at a higher price. This situation is truly absurd, but the resulting difference is actually compensated by ordinary consumers: 1.1 million consumers pay more so that about 300 consumers can enjoy cheap electricity.
"I have repeatedly stated that market liberalization poses a direct risk to Armenia's energy security. The data provided confirms this "on the ground". In the current situation, it is becoming obvious that the containment of electricity tariffs in Armenia is purely temporary. They will likely remain in place next year under the same schemes, which is logical, given the expected electoral processes. However, artificial support for maintaining tariffs cannot be sustainable. The 'tariff bubble' will eventually burst, leading to numerous socioeconomic risks. By the way, I would also like to hear the position of the former management of ENA on this matter. The issue, as we can see, is not new and has become an important tool for implementing tariff policy. Personally, I have not heard of ENA raising this issue in any format, which would obviously create obstacles for the company itself," the expert concluded.
