Rising Gas Prices Would Not Create an Insurmountable Economic Crisis for Armenia, Says Economy Minister

YEREVAN — A potential increase in natural gas prices could affect Armenia’s economy by 5–7 percent or more, but it would not create an insurmountable economic crisis, according to Armenian Economy Minister Gevorg Papoyan.

Speaking to journalists about a recent Eurasian Economic Union (EAEU) report concerning Armenia, Papoyan described a possible increase in gas prices as undesirable but manageable.

“Such a development would not create an impossible situation from which we could not find a way out, although it would be highly undesirable,” the minister said.

Papoyan noted that Armenia has effectively been paying, directly or indirectly, for the difference between the price of imported natural gas and its market value.

“An increase in gas prices is not desirable. However, I believe that, over time, purchasing gas at market prices should become a logical and normal practice. We must gradually adapt to reach that point,” he explained.

The minister emphasized the importance of preparing Armenia’s economy to operate under market-based pricing conditions rather than relying on preferential arrangements.

“We must consider purchasing everything at market prices. If we are not buying something at its market price, we are ultimately paying for the difference in one way or another, because no country will sell us anything cheaply without expecting something in return,” Papoyan said.

He also compared the potential economic consequences of higher gas prices with the severe downturn Armenia experienced during the global financial crisis in 2009.

According to Papoyan, Armenia’s economy contracted by approximately 15 percent that year, producing consequences far more serious than those anticipated from a possible increase in natural gas prices.

While acknowledging the potential economic challenges, the minister maintained that Armenia would be capable of adapting to higher energy costs and managing their impact on the national economy.