Finance Ministry of Armenia has responded to the request of the Union of Informed Citizens concerning the amount the electricity price subsidies will cost the Government.
The Union told ArmInfo that the Finance Ministry recommended them to apply to the Ministry of Energy and Natural Resources over the issue. "Minister of Energy and Natural Resources Yervand Zakhryan said he is unaware how much will be spent to implement the given enactment of the Government. It turns out that the Government adopted an enactment having no idea how much it will cost the taxpayers," the Union said.
Meantime, the Union of Informed Citizens has calculated how much the Government will have to spend to subsidize the electricity price hikes. According to the last year's data, the population of Armenia consumed 945-965mln kWh electricity in 6 months, while companies consume 475-490mln kWh low voltage (0.38KV) electricity - few of the companies will fall under subsidies. Consequently, the subsidies for the legal entities will total 70-85mln kWh for 6 months. It may be said without exaggeration that 1015-1050bln kWh electricity will be subsidies for Aug-Dec 2015. Multiplied by 6.93 drams, it will total 5.8-6.1bln drams (about $12.5 million). This is how much the Government will have to pay to the Electric Networks of Armenia.
The public watchdog's decision to increase the electricity price by 6.93 drams has sparked waves of protests in the country. The Government promised to subsidize the price hike for some small companies partially, which has become a reason of more protests. The Government will subsidize the 6.93AMD per 1kWh of electricity for the population and assume half of the electricity expenses of SME, in particular, 250kWh electricity for the SME consuming up to 500kWh. The big business will not be subsidized. The subsidies will be provided before the completion of the consultative meetings. On 1 August 2015 the electric power price for the ultimate consumers of Armenia was increased by 6.93AMD per 1 kWh: the daytime tariff for the ultimate consumers grew from the current 41.85 AMD to 48.78 AMD per 1 kWh, while the nighttime tariff rose from 31.85 to 38.78 AMD (VAT inclusive). The electricity rate will be subsidized until the Deloitte & Touche consulting company issues a resolution on the audit of the energy system and electricity distributing networks.