The second increase in utility tariffs in a year looks like a dangerous measure
[ad_1]
The increase in tariffs for housing and communal services should take place from December 1, 2022. As provided by the Forecast of the socio-economic development of the Russian Federation for 2023 and for the planning period of 2024 and 2025, prepared by the Ministry of Economic Development, taking into account the projected indexation of gas prices and electricity tariffs for the population, the total payment of citizens for utilities, starting from the last month of this year , the national average will grow by 9%, from July 1, 2024 – by 6.3% and from July 1, 2025 – by 5.3%.
Okay, let’s leave 2024-2025 alone for now. We would like to understand and understand what will happen in the near future. And everything will somehow not be very good, judging by the forecast: 9 percent indexation of the total utility bill is a lot. Let me remind you that this payment includes payment for utilities: electricity, gas supply, water supply, sewerage, heating and garbage collection. Since we are talking about a total payment, some services may rise in price more, and some less. But that doesn’t make it any easier. After all, it is clear that the increase in payment will be large.
And another important feature: the growth rate of tariffs for a particular service in different municipalities within the same region may vary. Moreover, for individual municipalities, the amount of indexation may even exceed the percentage established for the constituent entity of the Russian Federation. That is, to go beyond the established 9 percent.
But we will still rely on the average figure. Why is 9% growth a lot? We can recommend that every doubter calculate how much his own utility bill will increase, and see if his estimates of the indexation size change after that. And still it is possible and it is necessary to take into account objectivity for the sake of some important circumstances. For example, what happens to the incomes of the population at the same time, after which there will be no doubt that it is impossible to raise utility tariffs in this way. I propose to follow this path and take into account at least some circumstances.
The upcoming indexation of utility bills is already the second in 2022, since July 1, the total payment of citizens for utilities has been increased by 4%. That is, it turns out that in addition to the already carried out indexation by 4%, a 9% increase is added this year. And this will give an increase of almost 13.4% per year (do not add, but multiply the indices). In other words, the indexation of the aggregate tariff will be 13.4%, with the officially forecasted inflation for 2022 at 12.4%. Citizens’ payments for housing and communal services should grow faster than inflation? What would that be?
There is a reassuring explanation for this in the Forecast: in 2023, it is not planned to index the total payment of citizens for utilities at all. That is, they want to raise tariffs in an extraordinary way now, promising that there will be no indexation next year. However, who today will vouch for whether or not there will actually be indexation of tariffs in 2023? So far, the authorities seem to not want to do this, and then, you see, they want to. We didn’t plan the upcoming December indexation either, but today everything is already in the plan, and there is no doubt that the increase will take place. So it does not reassure at all that no indexation of utility bills is planned for the next year.
I must remind you that it was on July 1 that indexing of utility tariffs began in our country in 2013. This was done in order to reduce inflationary risks that are realized at the beginning of the year, in January, when there is usually a noticeable increase in prices and tariffs. In fact, the right decision, which was proved by subsequent annual practice. And here you go – in 2022, suddenly such a sharp change in the rules of the game with the addition of another indexation!
As an additional reassurance, the Forecast states that in order to reduce the burden on tariffs for the population, additional economically justified expenses can be partially offset by the current mechanism for allocating subsidies to resource supply organizations from regional budgets when establishing feed-in tariffs for the population. I will explain to readers that it is necessary to pay attention to the word “may”, that is, expenses may or may not be compensated. If they are not compensated, then there can be no question of any reduction in the growth of tariffs.
You can also sweeten the pill with the assertion that the constituent entities of the Russian Federation will have to fully use the existing mechanism for allocating targeted subsidies to low-income citizens with a share of spending on housing and communal services above the established regional standards. The regions are also invited to simplify the procedure for obtaining subsidies, make it more transparent, understandable and accessible to citizens. Question: is this mechanism for allocating targeted subsidies to low-income people not being “fully used” now? Why? And what should magically change for the low-income from December 1st? And what about those categories of citizens who, according to formal criteria, do not belong to the low-income, what should they do?
There is no doubt that the current such significant indexation of utility tariffs will lead to an increase in the debts of Russian citizens for housing and communal services, which, in the first quarter of 2022, have already exceeded 800 billion rubles. But debts are also penalties for late payment for the services provided.
Debts are, after all, up to the shutdown of utility resources, because the management company can limit or suspend the supply of resources to the debtor. Of course, first he must be notified of the upcoming shutdown and asked to pay off the debt. But if the debt is not repaid on time, they can limit the utility resource. Perhaps on the part of the management company and appeal to the court for debt collection. In this case, the property of the non-paying citizen may be seized to pay off the debt.
In extreme cases, a persistent defaulter can even be evicted, the legislation allows this. Yes, in practice this happens very rarely, but it is also possible, and in strict accordance with the law.
Thus, there are risks of an increase in citizens’ debts due to a sharp increase in utility bills, with all the ensuing consequences.
This disappointing conclusion is also supported by the fact that all this is happening against the backdrop of a decline in real disposable incomes of the population. According to the same Forecast of the socio-economic development of the Russian Federation for 2023 and for the planning period of 2024 and 2025, in which plans for the growth of utility bills are announced, there is also a forecast for the dynamics of household incomes, according to which they should decrease in 2022 by 2, 2%. That is, the picture is as follows: real disposable incomes of the population are declining, while utility tariffs are rising sharply.
I’m not very sure, but I still express the hope that the authorities will abandon plans for a sharp increase in utility bills from December 1, 2022. Not the time, not the place, it’s wrong! It is clear that now the state is not very good with finances, and everything is not so good with resource-supplying organizations either (with such and such debts from the population and other payers). But the same state has the National Wealth Fund, in which for many years they saved up money for a “rainy day” and accumulated a lot (10.8 trillion rubles as of October 1, 2022). You can use it for such a good cause, so as not to burden people with a sharp increase in utility bills. Surely there are other possibilities for this. There is no need to follow the simplest path: to take and dump everything on the population. The simplest paths are not always the most correct ones. The story with a sharp increase in utility bills is the same case.
Newspaper headline:
Not the time to raise utility bills
[ad_2]
Source link
