Think tank head says rise in electricity rates would not trigger dramatic hike in prices of other goods
Head of a Yerevan-based think tank has downplayed today widespread concerns that the rise in electricity rates would trigger a dramatic hike in prices of other goods.
According to Tatul Manaseryan, head of Alternative think tank, the rise in electricity rates would not result in rise of prices in the near future.
On June 17, Armenia's Public Services Regulatory Commission (PSRC) voted to raise electricity tariffs by 6.93 drams ($0.015 or 16.7%) per kilowatt-hour beginning from August 1. The decision gave rise to street protests in Yerevan and other cities in Armenia.
The “No To Plunder” civil campaign which organized the protests blocked Marshal Baghramyan Avenue in central Yerevan with a two-week sit-in, demanding that the government reverse the price hike. Baghramyan Avenue was unblocked by the police early morning July 6.
On June 27, following his meeting with Russian Minister of Transport Maksim Sokolov (co-head of the Russia-Armenia Intergovernmental Commission), President Serzh Sargsyan announced the upcoming audit of the Electricity Networks of Armenia, which originally sought a 40% rise. Sargsyan also said that the government would pay the tariff increase for households pending the completion of the audit.
"As long as the government will be compensating for the increase of the tariff, there will be no threat of a significant increase in prices. But in the longer term it is possible", said Manaseryan at a press conference on Friday.
Under an August 31 government decision, small firms will pay the old price of electricity for up to 250 kilowatts of power used by them each month. Entities exceeding that limit, but no more than 500 kilowatts of power will be subsidized the difference which is about 7 drams. The same is true concerning households, Makaryan he said
According to Manaseryan, there is the potential to reduce electricity price. ‘A thorough study of ENA’s performance, reduction of losses, modernization and bringing to justice those responsible for failures could change the situation for the better,’ he said.
"Armenia is not obliged to pay for the losses of the company. If the company does not work effectively, the model of management must be changed," he added.
He said a possible solution to the problem is the nationalization of the Electric Networks of Armenia. The Electricity Networks of Armenia is a 100% subsidiary of Russian INTER RAO UES. -0-