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Armenian Premier Expecting Another Rise In Russian Gas Price

Armenian Prime Minister Tigran Sarkisian

Armenian Prime Minister Tigran Sarkisian

YEREVAN -- Armenian Prime Minister Tigran Sarkisian says it is likely that Russia will again raise the price of natural gas to Armenia next year, RFE/RL's Armenian Service reports.

Sarkisian told RFE/RL on September 10 that "naturally this issue was discussed during the Russian President [Dmitry Medvedev's August] visit to Armenia. We always keep this issue at the center of our attention."

Sarkisian said ArmRosGazprom (ARG) and Gazprom are holding "consultations" over the scale of the next price rise.

Sarkisian's comments come after Andrei Kruglov, a deputy chairman of Russian gas giant Gazprom, said last week that the company is determined to bring its gas tariffs for Armenia, Moldova, and Belarus up to "market-based" international levels in the coming years. He stressed the fact that Gazprom currently sells gas to Western and Central European countries for $308 per thousand cubic meters.

The cost of Russian gas to Armenia rose by 14 percent last year and by another 17 percent, to $180 per thousand cubic meters, in April. That led state regulators in Yerevan to approve corresponding increases in domestic gas prices sought by the national gas distributor, which is primarily owned by Gazprom.

"The management of ArmRosGazprom has received appropriate instructions to continue consultations with their Russian partners," he said. "I think that
within several months the ArmRosGazprom management will give you clear information on the results of those consultations."

ARG spokeswoman Shushan Sardarian confirmed that the gas operator, which this year became Armenia's largest corporate taxpayer, is discussing the issue with its Russian parent company. She declined to give any details.

Russia has remained Armenia's principal gas supplier even after the South Caucasus country began importing gas from neighboring Iran in May 2009. The
volume of Iranian gas deliveries, modest at present, is due to grow significantly over the next few years. Iranian gas is expected to be primarily used by Armenia to generate electricity that will be exported back to Iran.