Russian Cabinet bridles natural monopolies to keep tariffs down

Russia's Cabinet is determined to drastically limit natural monopoly tariff-rise demands this and next year, say papers drafted by the Ministry of Economic Development and Trade for tomorrow's Cabinet session, to be chaired by Prime Minister Mikhail Kasyanov.

Monopolies are demanding gas tariffs to go 26% up, starting January 1, 2003; electricity by the year's average 54% at several goes; same for federal wholesale energy markets by 18%; and rail tariffs by 14%.

Meanwhile, inflation is prognosticated to shrink from this year's 14% to 12 or even 10% next. If, on the contrary, tariffs skyrocket as monopolies desire, it will reach 13-15%--something the federal Cabinet will not put up with, so monopolies have to restrain their appetite, point out ministerial experts.

Tariffs are not to whip up inflation higher than an annual 3-4%. A price ceiling will be established proceeding from that.