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ARMENIA BRACES FOR GAS-FIRED INFLATION HIKE
Business New Europe
July 10 2013
bne
July 10, 2013
Armenia is preparing for a sharp inflation hike as consumer prices
are already reported to be reacting to the large increase in energy
tariffs implemented on June 7. That move was in turn motivated by
the recent hike in the price of Russian gas imports.
Armenia's Public Services Regulatory Committee (PSRC) approved the
tariffs increases last month, after Gazprom said it would raise
the price of gas by 18% starting in July. The Armenian regulator
ordered gas tariff price put up by 18.2%. The large share of Armenian
electricity generated at gas-fired power stations means electricity
bills have increased 26.7%.
According to local press reports, food prices have been quick to
respond. Bread, for example, is already more expensive in the regions
and the suburbs of the capital Yerevan. Although prices have so far
remained constant in the city itself, bread producers say prices are
also set to increase there, News.am reports.
The Russian price hike is widely seen as an attempt to press Yerevan -
one of its closest allies in the region normally - to drop its pursuit
of an EU Association Agreement, and join the Moscow-led Customs Union
instead. Gazprom is at the centre of a similar campaign in Ukraine.
Given Armenia's high poverty level, the move was politically unpopular,
and even sparked a small protest against the Russian embassy in
Yerevan. However, Armenia remains reliant on Russian gas.
Although it has said it will look for alternatives, its option remain
limited, with the leading candidate Iran charging even more.
http://www.bne.eu/story5170/Armenia_braces_for_gasfired_inflation_hike
From: A. Papazian
Business New Europe
July 10 2013
bne
July 10, 2013
Armenia is preparing for a sharp inflation hike as consumer prices
are already reported to be reacting to the large increase in energy
tariffs implemented on June 7. That move was in turn motivated by
the recent hike in the price of Russian gas imports.
Armenia's Public Services Regulatory Committee (PSRC) approved the
tariffs increases last month, after Gazprom said it would raise
the price of gas by 18% starting in July. The Armenian regulator
ordered gas tariff price put up by 18.2%. The large share of Armenian
electricity generated at gas-fired power stations means electricity
bills have increased 26.7%.
According to local press reports, food prices have been quick to
respond. Bread, for example, is already more expensive in the regions
and the suburbs of the capital Yerevan. Although prices have so far
remained constant in the city itself, bread producers say prices are
also set to increase there, News.am reports.
The Russian price hike is widely seen as an attempt to press Yerevan -
one of its closest allies in the region normally - to drop its pursuit
of an EU Association Agreement, and join the Moscow-led Customs Union
instead. Gazprom is at the centre of a similar campaign in Ukraine.
Given Armenia's high poverty level, the move was politically unpopular,
and even sparked a small protest against the Russian embassy in
Yerevan. However, Armenia remains reliant on Russian gas.
Although it has said it will look for alternatives, its option remain
limited, with the leading candidate Iran charging even more.
http://www.bne.eu/story5170/Armenia_braces_for_gasfired_inflation_hike
From: A. Papazian