Armenia’s fuel market has entered a new phase. For many years, around 80% of all fuel imports came from Russia. Today the situation is almost the opposite: most imports now come from third countries. The current market dynamics were explained by Sasun Beglaryan, CEO of Flash.
Origin of the fuel is the main pricing factor
According to Beglaryan, the most important factor affecting fuel prices is the origin of the product. The farther the supplier, the higher the final price due to logistics. Armenia also follows EAEU quality standards, which increases the production and import cost.
During the last two years, Armenia has significantly increased imports from Greece, Bulgaria, and Romania. This shift is driven by the situation in Russia and the difficulties with stable supply from the previous main partner.
From dependence on Russia to diversification
Before the Russia–Ukraine war, nearly 80% of Armenia’s fuel came from Russia. Today Russian imports have dropped to a minimum. As a result, Armenia now purchases most of its fuel from European suppliers, which directly increases prices.
Beglaryan notes that the fuel market is not like the clothing market. Suppliers cannot be changed at will. Fuel logistics must be planned a year ahead, and any deviation from the plan immediately affects domestic prices.
Why Iran cannot become a stable supplier
Although Armenia and Iran share a border, Iran cannot provide the country with reliable fuel supplies. The reasons are clear:
- Iranian fuel standards are below EAEU requirements;
- Iranian refineries lack the capacity and often cannot meet domestic demand;
- some fuel entering Armenia as “Iranian” is actually of Russian origin.
Is European fuel really better?
Many drivers believe that European fuel is significantly better than Russian fuel. Beglaryan says the difference is exaggerated. There are technological distinctions, but they are not as dramatic as some claim. Russian fuel is also produced with modern technologies.
Logistics remain the biggest cost driver
Armenia’s lack of access to the sea is still one of the main reasons for high fuel prices. Fuel must travel a long and expensive route: sea transport, multiple transfers, storage, and then land delivery. Each stage adds to the final price, especially when fuel is purchased on a quota-based market.