The Armenian government is in talks with Russia over gas prices, Armenian Prime Minister Tigran Sarkisyan said on Friday.

"In the next two months, ArmRosgazprom will make a statement on the results of those negotiations," Sarkisyan said. ArmRosgazprom is a majority owned unit of Russia's gas giant Gazprom, and is a natural gas monopoly responsible for the supply and distribution of Russian natural gas on Armenia's market.

Gazprom has previously announced its transition to market pricing with Belarus, Moldova and Armenia and expects an increase in gas prices for those countries in 2011.

Tariff policy was discussed with Russian President Dmitry Medvedev during his August visit to the country Sarkisyan said.

"This issue has always been at the centre of our attention. The administration of ArmRosgazprom has already been given permission to negotiate with the Russian side, so that the methods surrounding the tariff policy would not be unexpected for us, and so that those regulations on price increases that are in practice worldwide, would be the same for us," Sarkisyan said.

Armenia's commission on public service regulation increased gas prices for domestic users to $0.34 from $0.25 per cubic meter in April. For businesses that use over 10,000 cubic meters of gas, the price went up by 13 percent to $243.13.

The commission justified the gas increase by saying that the cost of imported gas rose 17 percent to $180, the national currency, the dram fell against the dollar, and 2009 gas consumption slumped by 20 percent. It was also necessary to compensate ArmRosgazprom for its investment and increasing operating costs due to the expansion of a gas supply network, the commission said.

YEREVAN, September 10, (RIA Novosti)