Electricity price hike sparks heated debates in Armenia

By: Sara Rajabova

The electricity price hike in Armenia has sparked a wave of public discontent and storm of criticism on the part of both experts and opposition politicians.

An increase in electricity tariffs in the country, where the share of poor people stand at 32 percent of the country’s overall population, is expected to further aggravate preexisting social difficulties among the most vulnerable.

The government has explained its decision by arguing the need to avoid bankrupting the national power company – the Electric Networks of Armenia. The company earlier requested for an electricity price hike in Armenia.

Observers noted that the rise in electricity tariffs will consequently trigger a price increase for first necessity goods in a country already plagued by a miserable economic situation. In this context, people’s anger toward the price hike is quite understandable.

Such an increase in electricity tariffs will inevitably reduce people’s purchasing of goods and services and thus negatively impact on other sectors of the economy.

Armenian sociologist Aharon Adibekyan said an electricity price increase in Armenia will impact suppliers and consumers, alike, Armenian media reported.

“First and foremost, the supplier puts itself into a dead end, since as a result of the price hike, a number of electricity consumers will reduce their consumption. Moreover, it will affect consumers, especially those families receiving social benefits,” he said.

The sociologist expressed the view that even though an electricity price increase is inevitable in Armenia, this should be carried out through “soft measures.”

The electricity price increase caused a heated discussion among parliament factions, especially, the opposition politicians, that is already at odds with Armenia’s incapable government.

They demanded that the energy ministry be made to launch an investigation in order to find out what happened to the Electric Networks of Armenia company in view of explaining the ongoing increase in tariffs.

The current tariff on ENA for the population stands at 41.85 drams per 1 kWh / day and 31.85 for night. The company proposed to increase prices up to 58 and 48 drams respectively.

The four Armenian National Assembly (NA) political forces met on May 18 at the opposition Prosperous Armenia (PAP) NA Faction to discuss the proposed electricity price hike.

Head of Opposition faction Prosperous Armenia Naira Zohrabyan said the ENA’s explanations remain murky at best. She remarked that if the company was indeed so unprofitable why fight for its management? “Why do they still want to manage it then,” she inquired.

“If the reason for the losses of the company is indeed bad management, it is not clear why management does not change or abandon such an inefficient business. Holding a company, which for years did not give anything except a loss, does not sound sensible. In any case, the consumer is not obliged to pay for it,” Zohrabyan said.

Head of the Armenian National Congress Levon Zurabyan accused the government of concealing the truth about the financial condition of power grids.

He considered the situation shameful as consumers are being forced to pay operators’ debts.

Following much discussion and criticism over this issue, Armenia prime minister held a discussion on May 18, Hraparak daily reported.

The report said they discussed the least amount of money the government can justify increasing to dodge a wave of public discontent. The Armenian government’s decision to raise electricity prices by 10 percent in July last year was met by public protests and strong criticism from the opposition.

“The beneficiaries claimed that increasing electricity prices by 6-7 Armenian drams per cubic meter is inevitable due to a number of factors including the dram-dollar ratio. And it was decided that the electricity prices will rise by 6-7 drams,” the report said.

Hraparak wrote that it was previously announced that the electricity price may increase by 17 drams. It appears that fears of unrest forced officials to review the trend down.

SOURCE: Azer News