Price trick for Armenians

The Public Services Regulatory Commission has announced that as of August 1, the electricity tariff for consumers in Armenia will reduce by 2.58 drams per kW/h.

However, local media reports that the tariff will actually increase for residents who consume up to 250 kW/h of electricity per month. Because the decision of electricity tariff subsidy, according to which the Armenian government had assumed a tariff subsidy, is still in force until August 1. So, the electricity prices will actually increase by 4.35 drams for these consumers.

The increase can be prevented if the government decides to continue the subsidy. But even in that case, the prices will remain the same, in best-case scenario, for those who consume less than 250 kW/h of electricity per month, and the amount of subsidy will reduce.

The matter is that in 2015 the electricity price for consumers increased by 6.9 drams, which was explained with financial problems of the Electric Networks of Armenia (ENA). The company now operates without losses, but the new lower tariffs are not equivalent to "the old prices". Consumers even after this price reduction will have to pay more than they used to pay last year.

Meanwhile, economist Vahagn Khachatryan claims that the electricity price can reduce by 10 drams, noting that the calculations based on which electricity and gas prices were defined are not in line with the Armenian reality, Media Center Armenia reported.

“Both electricity and gas prices are calculated by the logics of old Soviet planned economy. According to our calculations, today the gas price in Armenia can reduce from 156 drams to 100 drams, and the electricity price can reduce approximately by 10 drams. Electricity producing and gas importing company can show much expenses but it does not mean that the price should increase,” the speaker said.

Local media reports that from 2010 to 2016 the daily tariff for electricity increased by more than 1.6 times, and the night tariff - almost 2 times. Accordingly, only through increasing the rate and only for public, the profit of Electric Networks of Armenia hit about $20 million for the quarter.

Several thousand people protested in the Armenian capital Yerevan and other regions last year against the decision to raise electricity prices. Media reported police violence and arrests. The protests, which were organized by young activists, were triggered by the state regulating commission’s decision to increase the tariff on electricity by 17-22 percent from 1 August.

However, the government decided to disperse the protesters, rather than to reduce the income of ENA, which is named among the largest shadow "funds" of the ruling Armenia elite.

Not surprisingly, the authorities have not allowed the “ordinary citizens” to get into “their pockets”.

Armenia, a former Soviet republic of 2.9 million people, has been badly hit by the economic crisis, which has hurt exports and muchneeded remittances from Armenian workers abroad.