Rising prices for Russian gas will hit Armenia’s economy: Alexander Frolov

Alexander Frolov, Deputy Director of the International Institute of Energy Policy and Diplomacy at MGIMO, commented to Alpha News on a statement by Martin Galstyan, Chairman of the Central Bank of Armenia, that Russia’s gas price increase does not fit within the country’s planned economic scenarios.

According to the expert, Armenia currently receives Russian gas at a price that remains extremely low by global standards, despite being higher than domestic Russian prices.

“Armenia receives gas at extremely low prices. They are higher than prices in the Russian Federation, but lower not only than current global market rates, but also than those seen a year ago. This is an extremely low price by global standards,” Frolov noted.

According to the expert, an increase in the purchase price of gas will inevitably lead either to higher tariffs for the public and businesses, or to an additional burden on Armenia’s state budget.

“If the wholesale price is raised, the state will have to either raise tariffs, which will hit the end consumer’s pocket, or compensate for the difference between the purchase price and the tariffs. Either way, it will affect the country’s economy,” Frolov emphasized.

Frolov also noted that a significant change in the cost of Russian gas could affect Armenia’s projected economic indicators for the coming years.

“Any price increase will push economic indicators beyond the previously calculated forecasts,” Frolov concluded.