Armenian importers benefit from international petrol price hike

April 5, 2012 - 14:34 AMT

PanARMENIAN.Net - Armenia has been increasingly facing petrol price rise since 2012 in view of its gradual growth on the international markets, with international petrol price amounting to USD 100-120 per barrel, management expert Harutyun Mesropyan said.

However, there is discrepancy between the international tendencies and petrol prices in Armenia, and the importers benefit from it, he told a press conference in Yerevan on April 5.

According to the expert, Armenian petrol importers gain surplus profit at the expense of consumers because the tax bodies did not calculate an important index of “profit norm” which currently exceeds 50% for petrol.

If Armenia had adequate price growth, 10 liters of A-92 petrol would cost AMD 4000 instead of current AMD 5000, i.e. 25% less.

Mesropyan further said that unequal distribution of “profit norm” causes damage to other branches of economy, particularly the agriculture where this index never gets over 10%, as well as the industry.

“So do not be surprised that governmental moves aimed to promote development of this areas yield no results,” the expert said.

For his part, Vazgen Safaryan, head of Armenian Union of Local Manufacturers added that bringing petrol into the general taxable domain (transfer from fixed payments to VAT since 2012) brought no results. Safaryan suggests that the government review the fiscal policy for petrol importers because about 40% of price accounts for the taxes paid by importers.

In this regard, he said there was drastic cutback in petrol trade in Armenia. “Several years ago 26-27 thousand tons on petrol were sold in Armenia, while now the figure makes only 8000 tons,” Safaryan said.

According to him, 80-85% of 450000 vehicles registered in Armenia currently use gas because petrol has become a luxury they cannot afford.