Electricity Tariffs to Rise by 14%, Gas Tariffs by 20% from January 1, 2003

The Russian government today approved increases in gas and electricity tariffs for next year. From January 1, 2003 electricity tariffs will rise by 13-14% and gas tariffs by 20%. This was announced to journalists by Russian Minister for Trade and Economic Development German Gref after a meeting of the cabinet.

According to Gref, RAO UES of Russia proposed increasing the subscription charge for electricity supplied from its sources by 22% from the beginning of 2003. However, the government agreed on a 12% increase. Tariffs on electricity from the Federal Wholesale Electricity and Power Market will be increased by 17-19% from January, whereas RAO UES of Russia had proposed an increase of 22-24%. Rosenergoatom proposed increasing the tariff on electricity generated by Russia's nuclear power stations by 39%, but the government decided to increase it by only 9.9%. This means that the average increase in electricity tariffs will be 13-14%, said Gref. According to the Economic Development Minister, Gazprom proposed increasing gas tariffs by 37%, but the government agreed on an increase of 20%.

At the cabinet meeting Prime Minister Mikhail Kasyanov said 'the increase in tariffs for services supplied by the natural monopolies should not have any negative effect on the activities of companies and should not lead to an unjustified increase in consumer prices.' At the same time, according to Kasyanov, the adjustments to the prices for services and output from the natural monopolies should ensure they have enough income to function normally.

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