“What Influence Can Have the Reduction of the Electricity Price by 2.58 AMD on the Economy?”
“The Reduction of the Electricity Price by 2.58 AMD will have no significant impact on economy, there will be about eight billion AMD saving. The impact on the pocket of ordinary citizens will be also tiny, each family will save 650-700AMD monthly,” Economist Vahagn Khachatryan said during the discussion on “What Influence Can Have the Reduction of the Electricity Price by 2.58 AMD on the Economy?” at Media Center.

The economist thinks that the reduction of gas and electricity prices is related to the pre-electoral year. Media Center wondered if 2, 58 AMD is the maximum amount that was possible to reduce the electricity price. Khachatryan said, “I remind you that the price was increased by 15% last year. They explained that the Electric Networks of Armenia (ENA) had serious financial problems and the financial gap should be filled by the increase of the price. But the reason of ENA’s debts were not we, the consumers. They try to return us to old positions but only by 5%. When we look at the methodology of the price formation, it has nothing to do with the terms of market economy.” “Electric Yerevan” movement launched a year ago aimed not at the reduction of the price but, vice versa, increasing it and the change of the owner of ENA.  

Atom Margaryan, Dean of the Faculty of Regulation of Economy and International Economic Relations at the Armenian State Economic University, thinks that the reduction of price in such a way will have no significant impact on the consumers and businesses. “We altogether covered the debt of 24 billion AMD created because of the sloppy management,” the economist said. The price could be reduced more. “Our producers, in particular the basic industrial producers, will not be competitive with such prices,” the economist said. Margaryan explained why the price was not reduced more. “Armenia does not have the resources to give the nuclear power plant a second wind; it is possible only through credit resources. The Western structures are not much willing in this issue, so we can rely only on our strategic partner Russia's assistance. Probably this factor played a role in the reduction of a small amount of energy prices.”
Economist Vilen Khachatryan also said that this impact would have no significant impact on the households. He thinks that the field of the industry should be much more interested in the reduction of electricity price as it provides competition for them first. Taking into account that the government subsidized the price increase for some groups last year and the subsidy was for one year, we can state that we do not have a price reduction, but an increase. "More than 600 thousand inhabitants consume 250 kWh of electricity, and, of course, if the subsidies, eliminated after August 1, are convened to the mathematics, we see that it is not a reduction, and when we look at the percentage differences, it turns out that we have inflation.”

Arevik Sahakyan, Program coordinator at “Media Center”

To contact the author please send an email toareviksahakyan@mail.ru

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