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The Russian natural gas giant, Gazprom may reduce investments in Armenia following the government change in the country, Kommersant reported, commenting on the recent increase in the Russian gas tariffs.

The newspaper says that Gazprom was able to strike a deal with Yerevan on raising its wholesale gas price for Armenia from $150 to $165 per 1,000 cubic meters starting from 2019. However, Kommersant says, the price was increased for Gazprom Armenia, but Armenian authorities are not ready to raise domestic tariffs. 

The additional agreement on the gas price hike was signed by Gazprom Chairman Alexander Miller and Armenian Acting Deputy Prime Minister Mher Grigoryan on 31 December.

According to experts interviewed by the newspaper, Gazprom could cancel the internal discount, due to which its subsidiary Gazprom Armenia was able to invest in the country's infrastructure.

Kommersant reminds that the Russian company is the only gas supplier to Armenian consumers. In 2013, Gazprom and Gazprom Armenia signed a contract for up to 2.5 billion cubic meters of Russian gas to be supplied annually to Armenia between 2014–2018. In 2015, Gazprom supplied 1.9 billion cubic meters of gas to Armenia. 

Yet, Gazprom had to hold talks on additional agreements with the new Armenian authorities when Nikol Pashinyan was elected prime minister after a revolution in the spring of 2018, the article says, highlighting the complicated relations between Russian state agencies and Armenia since the government change. The article referred to the reported tax fraud cases in Gazprom Armenia.

Kommersant says Gazprom refrained from commenting on the outcomes of the gas talks, while Acting Deputy Prime Minister Mher Grigoryan told RFE/RL’s Armenian service that the government and Gazprom Armenia will start discussions on the issue this week and the talks may drag for months.

The article next quoted Pashinyan's spokesman Arman Yeghoyan as telling TASS that the government is not planning any subsidies and the prices will remain unchanged due to ‘internal regulations’. Meantime, Pashinyan told reporters on Monday Armenia keeps discussing the possibility of natural gas deliveries from Iran.

Kommersant next presented the opinions of some Russian experts on the issue. Particularly, Andrey Polischuk, an analyst with Raiffeisen bank, predicts a decline in Gazprom Armenia’s profit margins amid new arrangements between Gazprom and the Armenian authorities, but doesn’t expect critical outcomes.

Alexey Grivach from the National Energy Security Fund believes that the discount that Gazprom provided to Gazprom Armenia to secure investments in infrastructure development has been partially revoked.

According to the expert, given the Armenian authorities’ drastic steps against the Gazprom subsidiary, it would be strange to expect the resource to maintain in Armenia, however, he added, this might be the subject of further negotiations.