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Back to forest to collect firewood
by David Stepanyan
Saturday, May 18, 13:28
As anticipated, the authorities in power made an unpleasant surprise
for us, ordinary citizens, immediately after elections. This time,
they surprised us with news on upcoming gas price hike for Armenia.
Given the heavy social and economic situation in the country that has
been deteriorating over the last years, the upcoming gas price hike
will affect all the sectors of public life, starting from economy up
to environment.
On May 14 ArmRusgasprom CJSC applied to the Public Services
Regulatory Committee (PSRC) for revision of the effective tariff for
gas for small consumers from 132 to 221,000 drams ($532) per 1000 cu m
of gas. The tariff for big consumers (over 100000 cu m of monthly gas
consumption) will be increased to $392.
On May 16 some civil activists organized a picket in front of the
Government, PSRC, and the president's residency, against
ArmRusgasprom's claims and submitted a relevant application to the
Committee and the President's Administration. In response, Head of
PSRC Robert Nazaryan said that major reason of the gas price hike is
the growth of the import price from $180 to $270 per 1000 cu m. In the
meanwhile, the report by the State Revenue Committee says that
ArmRusgasprom has purchased the Russian gas for the customs cost -
$247 per 1000 cu m since Q1 2012. Nevertheless, the authorities
declared in December 2012 that gas is imported to Armenia for $180.
This means that the authorities have been concealing that the gas
tariff was increased over a year go not to ramp up the social tension
on the threshold of the parliamentary, presidential, and municipal
elections. By unofficial data, the authorities did it at the expense
of ArmRusgasprom, which had an unofficial agreement with the
Republicans to suffer losses till the very end of the election cycle
in the country. Now, when Mayor Taron Margaryan has retained his post
and the Republicans have finally monopolized the power in the country,
at least for the coming 4 years till the next elections, nothing holds
the authorities from telling the truth to the once again deceived
voters.
However, even in such situation Prime Minister Tigran Sargsyan has
managed to show how the authorities care for the people and promised
to subsidize the new gas tariff by 30 percent. In addition, the prime
minister declared that the country will start issuing eurobonds to the
world equity market. It appears that the government intends to do it
by means of another borrowing.
Theoretically, a 30% subsidizing of the new gas tariff at the expense
of internal resources and through issue of eurobonds could become a
reality. Prevalence of the country's foreign debt over the internal
debt is a ground for it. Given the specific Armenian mentality when
nearly all businessmen, a significant part of the population, salt
away money or keep it in banks for a rainy day. In other words, there
are possibilities to mobilize internal funds. However, there is
nothing that would motivate the population to withdraw their funds and
help Sargsyan implement a new financial scheme for the country. Over
the 20 years of independence, the Armenian people have been deceived
by the authorities too many times to trust in any initiative of those
in power. As for the foreign investors, including institutional
investors, the target audience of those securities, they will hardly
display interest in the Armenian securities amid actual stagnation of
economy and high political risks of the last years even in case of
very attractive interest rates.
It is noteworthy that the pro-western, anti-Russian political figures
in the country have already taken advantage of the rising price of the
Russian gas. Articles slamming Gazprom and its subsidiary
ArmRusgasprom and, naturally, official Moscow have already flooded the
press. Although the authorities urge Mass Media not to seek political
motives in the given issue, journalists say that the Kremlin once
again used the gas price as a political instrument. This sounds quite
probable, considering that Yerevan has not given any exact answer
either to Moscow or to Brussels regarding its involvement in the
Eurasian integration projects. It is especially relevant considering
Moscow's tough stance on possible diversification of import of Russian
energy resources with Iranian ones, which is within the national
interests of Armenia. Anyway, Gazprom's decision could not but arouse
a new wave of anti-Russian sentiments in Armenia. It would be naïve
thinking that Russia's western `partners' would not ride on the wave.
In addition, ArmRusgasprom that demands raising the gas price higher
than necessary should not pin too much hope on compensation of its
losses (mentioned above). It is not a secret that with every new rise
of the gas tariff, consumption falls in Armenia. More and more people
start using firewood, especially in rural areas. Consequently, over
the last years, firewood consumption in Armenia has been gradually
growing and will soon reach the level of those `dark, cold and
starving' 90s, despite the fact that the country's gas infrastructure
is developed by 95%. The only difference is the price. In the winter
of 2012, firewood cost 15,000-17,000 drams per cu m, while this year
it may cost the people 20,000-25,000 drams. In the meanwhile,
according to the survey by the German Society for International
Cooperation (GIZ) , the country's forests cover only 11.1% of the
total territory of Armenia. This winter will become a reason for more
destruction of forests, which will cause new problems to the
long-suffering environment of Armenia.
In the meanwhile, the Public Services Regulatory Committee of Armenia
displayed a surprising endeavor and initiated revision of electric
power tariffs not waiting for official applications by power
engineers. Local producers have already responded to the upcoming rise
of tariffs by price hikes. Evidently, this time the rise of the gas
tariff will not pass by the transport sector, which operates on
compressed gas nearly by 100%. What is especially strange about this
entire price hikes that the people and the political parties calling
them opposition almost do not protest. This circumstance one more time
shows the contrariness of the Armenian political field and culture, in
general. Unfortunately, the only explanation is that the people still
have an alternative - migration.
http://www.arminfo.am/index.cfm?objectid=58CAE9C0-BF9D-11E2-9B58F6327207157C&view=displaypageArticleWithCommen t
by David Stepanyan
Saturday, May 18, 13:28
As anticipated, the authorities in power made an unpleasant surprise
for us, ordinary citizens, immediately after elections. This time,
they surprised us with news on upcoming gas price hike for Armenia.
Given the heavy social and economic situation in the country that has
been deteriorating over the last years, the upcoming gas price hike
will affect all the sectors of public life, starting from economy up
to environment.
On May 14 ArmRusgasprom CJSC applied to the Public Services
Regulatory Committee (PSRC) for revision of the effective tariff for
gas for small consumers from 132 to 221,000 drams ($532) per 1000 cu m
of gas. The tariff for big consumers (over 100000 cu m of monthly gas
consumption) will be increased to $392.
On May 16 some civil activists organized a picket in front of the
Government, PSRC, and the president's residency, against
ArmRusgasprom's claims and submitted a relevant application to the
Committee and the President's Administration. In response, Head of
PSRC Robert Nazaryan said that major reason of the gas price hike is
the growth of the import price from $180 to $270 per 1000 cu m. In the
meanwhile, the report by the State Revenue Committee says that
ArmRusgasprom has purchased the Russian gas for the customs cost -
$247 per 1000 cu m since Q1 2012. Nevertheless, the authorities
declared in December 2012 that gas is imported to Armenia for $180.
This means that the authorities have been concealing that the gas
tariff was increased over a year go not to ramp up the social tension
on the threshold of the parliamentary, presidential, and municipal
elections. By unofficial data, the authorities did it at the expense
of ArmRusgasprom, which had an unofficial agreement with the
Republicans to suffer losses till the very end of the election cycle
in the country. Now, when Mayor Taron Margaryan has retained his post
and the Republicans have finally monopolized the power in the country,
at least for the coming 4 years till the next elections, nothing holds
the authorities from telling the truth to the once again deceived
voters.
However, even in such situation Prime Minister Tigran Sargsyan has
managed to show how the authorities care for the people and promised
to subsidize the new gas tariff by 30 percent. In addition, the prime
minister declared that the country will start issuing eurobonds to the
world equity market. It appears that the government intends to do it
by means of another borrowing.
Theoretically, a 30% subsidizing of the new gas tariff at the expense
of internal resources and through issue of eurobonds could become a
reality. Prevalence of the country's foreign debt over the internal
debt is a ground for it. Given the specific Armenian mentality when
nearly all businessmen, a significant part of the population, salt
away money or keep it in banks for a rainy day. In other words, there
are possibilities to mobilize internal funds. However, there is
nothing that would motivate the population to withdraw their funds and
help Sargsyan implement a new financial scheme for the country. Over
the 20 years of independence, the Armenian people have been deceived
by the authorities too many times to trust in any initiative of those
in power. As for the foreign investors, including institutional
investors, the target audience of those securities, they will hardly
display interest in the Armenian securities amid actual stagnation of
economy and high political risks of the last years even in case of
very attractive interest rates.
It is noteworthy that the pro-western, anti-Russian political figures
in the country have already taken advantage of the rising price of the
Russian gas. Articles slamming Gazprom and its subsidiary
ArmRusgasprom and, naturally, official Moscow have already flooded the
press. Although the authorities urge Mass Media not to seek political
motives in the given issue, journalists say that the Kremlin once
again used the gas price as a political instrument. This sounds quite
probable, considering that Yerevan has not given any exact answer
either to Moscow or to Brussels regarding its involvement in the
Eurasian integration projects. It is especially relevant considering
Moscow's tough stance on possible diversification of import of Russian
energy resources with Iranian ones, which is within the national
interests of Armenia. Anyway, Gazprom's decision could not but arouse
a new wave of anti-Russian sentiments in Armenia. It would be naïve
thinking that Russia's western `partners' would not ride on the wave.
In addition, ArmRusgasprom that demands raising the gas price higher
than necessary should not pin too much hope on compensation of its
losses (mentioned above). It is not a secret that with every new rise
of the gas tariff, consumption falls in Armenia. More and more people
start using firewood, especially in rural areas. Consequently, over
the last years, firewood consumption in Armenia has been gradually
growing and will soon reach the level of those `dark, cold and
starving' 90s, despite the fact that the country's gas infrastructure
is developed by 95%. The only difference is the price. In the winter
of 2012, firewood cost 15,000-17,000 drams per cu m, while this year
it may cost the people 20,000-25,000 drams. In the meanwhile,
according to the survey by the German Society for International
Cooperation (GIZ) , the country's forests cover only 11.1% of the
total territory of Armenia. This winter will become a reason for more
destruction of forests, which will cause new problems to the
long-suffering environment of Armenia.
In the meanwhile, the Public Services Regulatory Committee of Armenia
displayed a surprising endeavor and initiated revision of electric
power tariffs not waiting for official applications by power
engineers. Local producers have already responded to the upcoming rise
of tariffs by price hikes. Evidently, this time the rise of the gas
tariff will not pass by the transport sector, which operates on
compressed gas nearly by 100%. What is especially strange about this
entire price hikes that the people and the political parties calling
them opposition almost do not protest. This circumstance one more time
shows the contrariness of the Armenian political field and culture, in
general. Unfortunately, the only explanation is that the people still
have an alternative - migration.
http://www.arminfo.am/index.cfm?objectid=58CAE9C0-BF9D-11E2-9B58F6327207157C&view=displaypageArticleWithCommen t