Armenians may want to sit down before they take a look at their next utilities bill. Russia's Gazprom hopes to increase the price it charges for gas to Armenia, a country that relies almost exclusively on Russian gas.
To reflect the hike in the cost of Russian gas supplies, the local distributor, ArmRosGazprom, majority-owned by Gazprom, and associated transporter TransGaz want to increase the fee for domestic consumers from the current 132,000 ($318) to 221,000 drams (over $530) per 1,000 cubic meters.
The proposed hike, which regulators have yet to approve, is hard to digest for Armenians, already struggling with rampant unemployment and flat incomes. The news also sent coughing fits across the business community. ArmRosGazprom said that corporate users will also get a higher charge, but did not specify the desired new fee.
Utility fees have long been a worry for Armenians and the emotions are already heating up at the planned increased. Some believe that President Serzh Sargsyan is lucky he just got reelected, before the gas news hit. Speculation has circulated that his ruling party requested the distributor to keep gas prices low until after the February 18 vote.
The outpouring of anger is likely to force the government to petition for Moscow’s understanding. Yerevan does not have too many options to find a gas supply elsewhere. Its next-door enemy, Azerbaijan, most likely would rather supply gas to the moon. Iran, meanwhile, has yet to lay a pipeline to supply gas to Armenia in significant volumes.