VZCZCXRO8045
PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHYE #0671 2381458
ZNR UUUUU ZZH
P 251458Z AUG 08
FM AMEMBASSY YEREVAN
TO RUEHC/SECSTATE WASHDC PRIORITY 7934
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
RHMFISS/CDR USEUCOM VAIHINGEN GE//J2/J5/HSE// PRIORITY
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION WASHINGTON DC PRIORITY
RUEKJCS/JOINT STAFF WASHINGTON DC PRIORITY

UNCLAS YEREVAN 000671 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ENRG ETRD ELTN PREL AMGT GG AM
SUBJECT: TFGG01: GEORGIA SUPPLY LINE INTERUPTION BRINGS 
CRITICAL GASOLINE SHORTAGE; WHEAT IS NEXT 
 
Sensitive but Unclassified -- Protect Accordingly 
 
¶1.  (SBU) The disruptions to Georgia's rail and road network 
created by the Georgia-Russia crisis have begun to create 
economic problems for Armenia.  Armenia ordinarily receives 
90 percent of its import freight via Georgia.  A critical 
gasoline shortage has become the first serious symptom for 
Armenian consumers, while diesel and natural gas remain more 
plentiful for now.  Meanwhile, Armenia has about a 10-day 
supply of wheat on hand, while a 7,000 ton shipment awaits 
transport at Batumi, according to the cabinet chief of staff. 
 
¶2. (SBU) Virtually all gas stations in Armenia have partially 
or fully closed for lack of gasoline to sell.  A few 
companies continue to sell gasoline to their corporate 
clients who have pre-negotiated coupons or vouchers for 
gasoline, and even these clients are being restricted in the 
quantities they can purchase.  Mission employees have become 
aware over the past three to four days of the increasing 
scarcity of gasoline on the market;  many of our employees 
are now driving on fumes, and we are beginning to grapple 
with emergency conservation and back-up transportation plans 
for our own staff and community. 
 
¶3.  (SBU) Two companies -- Mika and Flash -- dominate the 
gasoline import market in Armenia.  We contacted both 
companies and were told that neither one was selling gasoline 
to ordinary customers -- only to corporate clients -- and 
neither company was taking on new corporate clients in the 
current shortage climate.  Mika and Flash are wholesalers to 
the remainder of Armenia's gas stations, and those other 
stations ran out of supply even earlier than did the Mika and 
Flash-branded stations.  Both companies declined to provide 
details of their remaining gasoline stocks in country, but 
the Mika representative noted that the situation is dire. 
The executive director of the Union of Businessmen and 
Manufacturers of Armenia (UMBA) also commented to post that 
the issue was already of grave concern to businesses, and saw 
no quick solution in sight.  UMBA has a number of leading 
freight and trucking companies among its membership and on 
its board, so is relatively well-informed about 
transportation and supply chain matters. 
 
¶4.  (SBU) The Transportation Ministry's press spokeswoman 
told the media that large quantities of fuel bound for 
Armenia are bottlenecked at the Georgian port of Batumi.  One 
convoy of fuel Qrived via Iran.  The spokeswoman gave no 
details of the Iranian convoy, but press report that the 
convoy brought 10 containers of flour, 19 containers of 
gasoline, and four of diesel. 
 
¶5.  (SBU)  David Sargsian, the PM's chief of staff, told us 
that the much-ballyhooed truck convoy that reached Armenia 
from Batumi contained only 500 tons of gasoline, which 
repesents just one day's worth of normal consumption. 
Armenia has also received roughly 300-400 tons per day from 
Iran, but this has been intermittent.  Nine railcars of 
gasoline are among the Armenia-bound shipments backed up in 
Batumi awaiting shipment, awaiting repair of the railroad 
line.  Sargsian told us that, despite local media reports, 
Georgian officials have not obstructed cargo trans-shipment 
to Armenia. 
 
¶6.  (U)  Armenian media quoted Georgian officials as stating 
that even once the railroad line is repaired and operational, 
the route remains cut by the presence of Russian troops. 
PENNINGTON