Armenia, Russia Agree To Retail Price Review

Armenian prime minister Nikol Pashinyan says reviewing Gazprom’s retail gas price was discussed and agreed during his September 8 meeting with Russian President Vladimir Putin.

“We agreed that we will study the entire pricing mechanism and its contractual basis," Pashinyan told local journalists the next day, adding that negotiations on gas pricing are to be held in November.

Gazprom Armenia, the only gas distributor in Armenia’s domestic market, is wholly owned by Russian giant Gazprom. The latter’s wholesale price for Armenia is $150/’000 m³ ($4.16/mn Btu) and its retail gas sales price is $286/’000 m³ ($7.94/mn Btu), both relatively very cheap by the international markets. But with the exception of Turkey, Armenia has the highest gas retail price of its neighbours, although retail gas prices in Russia, Azerbaijan and Iran range widely according to various factors, including seasonality, consumer sector, and consumption levels.

Household minimum and maximum gas prices among Armenia's neighbours

Credit: NGW data

In 2013, Gazprom and Armenia signed a sales and purchase contract for 2.5bn m³/yr until 2018. Iran also supplies gas to Armenia, but that is in exchange for electricity at a rate of 1 m³/3kWh.

Armenian prime minister Nikol Pashinyan (Credit: the government)