Beniamin Matevosyan: will a liter of gasoline cost 1,000 drams?

(Why will prices in Armenia keep rising?)

Political and economic life in Armenia after another election cycle resembles a long-running Turkish soap opera with a predictable ending. The observed rise in prices for key goods is not a coincidence, but the price to be paid for decisions made in recent months. Society is beginning to realize that the brief period of pre-election prosperity will have to be paid for out of its own pocket. All the resources that Nikol Pashinyan and the structures supporting him have invested in holding onto power since late 2025 are now being clawed back from the public, penny by penny.

The story of the fuel market has become the most vivid illustration of what is happening. A couple of months before the vote, gasoline from Azerbaijan began flowing into Armenia, presented as a symbol of a new economic reality. Companies affiliated with the authorities switched into dumping mode, driving prices down. This was a pre-election bribe to voters, dressed up as “diversification of supply.” However, the sponsors of the scheme understood from the very start that the temporary losses would be recouped as soon as the needed ballots landed in the boxes.

Not long passed before reality hit citizens’ wallets: the price of gasoline crossed the 600-dram-per-liter mark. Attempts to explain this by seasonality don’t hold up, in autumn, prices traditionally fall due to the drop in tourism and the end of agricultural work. In 2026, the situation is different, since the main driver of the increase is the need to recoup pre-election spending. There was no systemic diversification at all, only a plain commercial and political calculation.

The situation is compounded by other unpopular decisions being pushed through. A number of significant provisions are quietly being stripped from the health insurance system, and parliament has already approved increases in excise tax rates for 2027–2029. The excise tax on gasoline is being raised from 43,600 to 54,100 drams per ton, and on compressed gas, from 37,100 to 46,000 drams. At the same time, duties on cigarettes, e-cigarettes and wine are also being increased. The rise in transport costs will immediately be factored into the price of food and essential goods. Under these conditions, 1,000 drams per liter of gasoline could soon become a harsh everyday reality.

Signals from the financial-economic bloc are particularly alarming. Martin Galstyan, Chairman of the Central Bank, has stated that rising fuel costs are already putting pressure on inflation, and that a possible increase in the price of Russian gas would be an apocalyptic scenario for the economy. Against this backdrop, statements from representatives of the ruling party that there will be no “end of the world” as gas prices rise look like outright detachment from the problems of a population that will have to pay several times more for gas.

Why has this scenario become possible? Citizens believed simple promises, without getting a coherent alternative social doctrine or economic program from the authorities’ opponents. The absence of a clear alternative helped the current leadership preserve the status quo. As a result, people who were deceived are now forced to pay for restoring the capital of pro-government oligarchic structures. The economy is unforgiving: a period of harsh compensation always follows pre-election generosity.

Think about it…