Journalist Arshaluys Mghdesyan wrote on his Facebook page:
“When comparing the economies of Armenia and Georgia, among other variables, we should take into account energy in particular. First of all, gas. Neither Armenia nor Georgia has its own gas of industrial significance and is completely dependent on imports. However, this is where the similarity ends.
Armenia consumes 2.4 to 2.8 billion cubic meters of gas annually, while Georgia consumes up to 3.3 billion cubic meters.
Armenia imports gas mainly from Russia but also from Iran through the “Gas for Electricity” barter program. The price of Russian gas at the border in recent years has been $177 per 1,000 cubic meters.
Georgia receives most of its gas from Azerbaijan. Since Azerbaijani gas is transited through Georgia to Turkey and Europe, Georgia receives 5% of this volume at almost no cost as a transit fee, amounting to about 1 billion cubic meters, or about 1/3 of Georgia’s consumption.
In addition, Georgia has the right to purchase additional volumes at a preferential price. As a result, the average cost of imported gas for Georgia, according to various estimates, has decreased significantly to about $130.
Armenia also pays Georgia for the transit of Russian gas through its territory. Previously, it was 10% of the transit volume; then, if I am not mistaken, it became a sum. In recent years, Georgia has sharply increased its gas imports from Russia.
As a result, 1,000 cubic meters of gas in Georgia costs about $200-220 for the population. The current tariff for the population in Armenia is 143,700 drams. If we calculate 1 dollar at the exchange rate of 375 drams, then 1000 cubic meters of gas costs about 385 dollars for the Armenian consumer.
The fact that gas, which costs 177 dollars in Armenia, becomes 385 dollars for the final consumer is due to the Value Added Tax (20%), distribution network maintenance, salaries and administrative expenses, the peculiarities of the margin, and Gazprom Armenia’s monopoly position. This one company completely manages the internal network.
Unlike the absolute monopoly in Armenia, the system in Georgia is slightly different. Although SOCAR Georgia Gas, owned by the Azerbaijani SOCAR, is the dominant player and provides gas to most regions, gas supply to the capital, Tbilisi, is handled by another company, Tbilisi Energy. In other words, there is no absolute monopoly held by any one company across the entire territory of Georgia.”
