the cessation of energy supplies to China will hardly change prices in the Far Eastern Federal District – Kommersant

Possible suspension of supplies to the Russian energy company Inter RAO (MOEX: IRAO) to China will have a minimal impact on the cost of electricity for consumers in the Far East, said Russian Energy Minister Nikolai Shulginov. Previously, Inter RAO announced the risks of price increases.

“I think these deviations will be minimal. We need to find a balance between the interests of the exporter and consumers. We are looking for a balance in order to reach some minimum profitability, including Inter RAO, and provide some opportunity to reduce prices for consumers in the Far East,” Mr. Shulginov told reporters at the SCO energy forum (quoted from “ RIA News”).

At the end of September, Inter RAO notified China, Mongolia and Azerbaijan that due to the introduction of an export duty, the cost of supplies would increase by 7%. In case of refusal, the company allowed restrictions or complete cessation of supplies. Inter RAO representative Alexandra Panina said that if exports to China are stopped, the price of electricity for consumers in the Far East will “noticeably” increase.

October 2 “Inter RAO” reported on the beginning of partial restrictions on electricity supplies to China, since the parties did not agree on the inclusion of export duties in the price. As the company noted, negotiations are still ongoing. Inter RAO’s decision was made against the background introduction by the Russian government of export duties on a wide range of goods supplied outside the EAEU.

Read more about the situation in the Kommersant article. “There’s no point in bargaining here”.

Lusine Balasyan