Armenia’s government and Russian-owned gas distribution network have yet to agree on new retail prices of Russian natural gas supplied to Armenian households and corporate consumers, Deputy Prime Minister Mher Grigorian said on Monday.

The Gazprom giant announced on New Year’s Eve that it has raised its wholesale gas price for Armenia from $150 to $165 per thousand cubic meters. The announcement followed fresh talks held by the Gazprom chairman, Alexei Miller, and Grigorian as well as phone conversations between Russian President Vladimir Putin and Armenian Prime Minister Nikol Pashinian.

Earlier on December 31, Pashinian assured Armenians that they will not pay more for gas despite the 10 percent price rise. He said the internal gas tariffs will remain unchanged because of “our certain internal regulations.”

Grigorian told RFE/RL’s Armenian service that the government and the Gazprom-Armenia gas distributor will start discussions on the issue this week. Gazprom-Armenia will not ask Armenian utility regulators to allow it to raise the tariffs until those talks are over, he said.

“There is an explicit understanding that the issue needs to be examined in detail,” added Grigorian. “Everything must be done so that that tariff does not rise.”

Gazprom-Armenia cut its retail prices for households and corporate consumers in late 2016 shortly after its former executive director, Karen Karapetian, was appointed as Armenia’s prime minister. The company’s current chief executive, Hrant Tadevosian, said in November 2018 that it has operated at a loss, amounting to around $55 million, since then.

Grigorian suggested in this regard that Gazprom-Armenia’s losses can be cut or even nullified because of a significant difference between the costs of gas purchased from Gazprom and sold to Armenian consumers.

“The structure and causes of those losses need to be examined in depth so that we figure out the right ways of optimization that would not generate losses,” he said. “I think that it can be done.”

Gazprom provides more than 80 percent of Armenia’s gas which is mostly used for home heating and electricity generation. Also, most vehicles in the country run on pressurized or liquefied natural gas.