The authorities allowed the regions to exceed the established limits of tariffs for housing and communal services

The Russian authorities have decided on the maximum increase in utility tariffs. The fee change indices were approved immediately for a five-year period (2024–2028). The average price increase across the country will be 9.8% next year. But in some regions tariffs will rise much more seriously. There are municipalities where indexation risks approaching 20%.

The annual indexation of housing and communal services tariffs has objective grounds. Tariffs are influenced by macroeconomic indicators, so the government, assessing all factors, gives the percentage increase in the cost of housing and communal services.

9.8% is the average for 2024. This is the indexation level tied to the actual rate of inflation. Based on this guideline, indices were written for each region. Thus, from the second half of 2024, the average index in Moscow will be 11%, Moscow region – 10.7%, St. Petersburg – 9.8%, Leningrad region – 10.2%, North Ossetia – 13.7%, Khakassia – 4 %.

The authorities also approved possible deviations from the index. They are calculated separately for each region and can range from zero to 10.8%. For example, in Dagestan, the general increase in prices in the region is 10.8%, but it is possible to deviate in fees in individual cities by another 10.8%. Consequently, in one of the cities of this republic the fee may increase by 21.6%, and in another it may not change at all. The same situation is in the Smolensk region – a 10% increase in prices in the region and another 9.8% in individual municipalities.

“Knowing the catastrophic situation in Dagestan in the field of water supply, I fully admit that in some settlements the final indexation could be as high as 20%,” says Popular Front expert, member of the Public Council of the federal project “School of a Literate Consumer” Pavel Sklyanchuk. Everything will depend on the region attracting funds for investment projects for modernization. In addition to Dagestan, there are other regions where the deviation can be quite significant. So, in Khakassia, the average index for 2024 is 4%, but a deviation of 5.8% is allowed.”

It is clear that the permitted “deviations” from the index are the limit beyond which municipalities cannot go: less is welcome, but more is prohibited. But the practice of previous years shows that the regions are unlikely to waive the permitted maximum.

Experts associate the established indices and deviations with the recent statement of the Ministry of Construction, which warned the regions against artificially restraining housing and communal services tariffs. According to the head of the ministry, Irek Fayzullin, “a region that, thanks also to populism, does not raise tariffs is leading its territory to disaster.” Increasing utility tariffs is the responsibility of regions that prefer not to use this option. The measure is unpopular. But now, if local authorities do not do this, ordinary citizens will have to pay extra from the regional budget.

“Recently, the minister criticized governors who do not choose maximum indexation of tariffs. If this story is not over yet, then, probably, regional authorities will be obliged to recalculate tariffs to the maximum,” continues Sklyanchuk.

According to the expert, the established indices will be updated every year – as part of the Federal Antimonopoly Service’s program for the transition to long-term planning.

“The FAS believes that the longer the planning horizon, the better it is possible to calculate the required gross revenue,” explains our interlocutor. “But a lot will depend on how strongly the local authorities will oblige to select to the maximum all declared deviations. In my opinion, this should not happen.”

Let us remind you that the next indexation of housing and communal services tariffs is scheduled for July 2024. It turns out that in August – September people will receive receipts with indexed tariffs, which in some regions, judging by the words of MK’s interlocutors, will grow by more than 9.8%. But let us recall that in Russia the so-called social norm has been established – 22%. Thus, consumers should not pay more than 22% of their total household income for utilities. And if they pay, then they are entitled to a compensation benefit.

At the same time, according to the chairman of the Housing Union, member of the housing and communal services committee of the RF Chamber of Commerce and Industry, lawyer Konstantin Krokhin, we should not forget the precedent of 2022, when tariffs were indexed twice in a year – due to high inflation. “I think the final increase in housing and communal services tariffs next year will be close to real inflation. Now it is about 7%, and the Central Bank rate is 15%. People need to be prepared for the price of utilities to rise by 15–16%,” he concluded.