FAS proposed to double gas prices

Why was it needed

The Federal Antimonopoly Service (FAS) proposes to index gas prices by 8% in July 2024 and by the same amount in July 2025 for all categories of consumers: both households and industry. The proceeds from a twofold increase in tariffs, as the authorities assure, will be directed to the gasification of regions and the construction of new gas pipelines. But why should the population give for these purposes amounts that are much higher than inflation? Indeed, according to the government, inflation will not exceed 5% by the end of this year, and the Central Bank expects a return to 4% already in 2024. So why does the FAS allow gas tariffs to grow at a rate twice as high?

FAS proposes to raise regulated natural gas prices by 8% from July 1, 2024. And once again for the same amount – from July 1, 2025. The relevant document is posted on the portal of draft regulatory legal acts. Recall that the previous increase in gas prices in Russia occurred on December 1, 2022. Then it was 8.5%.

It is no secret that the source of funding for the activities of any natural monopolies is, first of all, tariffs set by the state. As you know, consumers pay for them. The largest category of consumers is the population, but in addition to ordinary citizens, industry and business also pay tariffs, laying increased costs in the final cost of their products.

The expected indexation of tariffs for energy resources, and in particular for gas, will hit the wallets of our citizens quite painfully if some restraining measures are not taken in advance, an expert of the Popular Front in the field of housing and communal services, a member of the Public Council of the federal project, believes School of the competent consumer» Pavel Sklyanchuk.

“Yes, there is a “ceiling” tariff regulation system in Russia, but we understand that within the limits of permissible deviations from the limit indices set by the government in the regions and in specific cities, the increase in tariffs may differ from the declared “average temperature in the hospital,” he notes.

According to the interlocutor of MK, plans for such indexation are cause for concern. “In 2023, we are not indexing. But the costs have a cumulative effect, so the shortfall in income will be transferred to subsequent periods, he emphasizes. – The cost of housing and communal services will also be affected by the rise in the cost of energy. Here we must take into account that the utility companies themselves are consumers of these energy resources. Therefore, the growth in the cost of gas purchases will be included in their own applications to regional tariff committees when raising the issue of tariff indexation in 2024.”

Sklyanchuk believes that the government needs to think about one very important problem. If both utility tariffs and regulated gas prices increase simultaneously from mid-2024, then this imposition will seriously increase the burden on the family budget.

The proceeds from the price increase will be used, among other things, for gasification programs in the regions, says Artem Deev, head of the analytical department at AMarkets. New gas pipelines, distribution infrastructure, etc. will be built, which is certainly good. But, according to the expert, it is very sad that these costs will again fall on the shoulders of consumers – after all, the increase will affect both industrial and household standards.

“In conditions when the Ministry of Finance is discussing the possibility of reducing budget expenditures by 10%, this is a quite expected and, by the way, quite humane measure. It is quite obvious that the country is now experiencing difficulties with the execution of the budget, and all forces are thrown into ensuring security and countering sanctions. But it is still necessary to bring gas to the regions. This measure will allow not to postpone the execution of the program, but simply to redistribute the financial burden,” he believes.

The increase in gas prices is planned from July 1, 2024. Inflation in the country by that period is predicted to be no higher than 5%, but this forecast by the regulator may well not come true, Deev believes. “In any case, in order not to lose the pace of the gasification program, tariffs must be indexed by a value greater than inflation, and I think this is partly why the FAS offers 8%,” he concludes.

Published in the newspaper “Moskovsky Komsomolets” No. 29067 dated July 11, 2023

Newspaper headline:
Double gas loop