Energy production costs drop, tariffs increase
Russian consumers are the losers as energy companies continue to boost energy tariffs at the same time as energy generation costs drop sharply.
A paradox: while the costs of energy generation in Russia have dropped massively the last months, consumer prices on energy still continue to increase. From 1 January, ordinary Russians have had to pay 25 percent more for electricity, while the industry has had to pay for a 18 percent price hike.
According to Nezavisimaya Gazeta, the generation costs on oil is down 76,8 percent from August 2008, while gas is down 14,2 percent.
Meanwhile, energy consumption drops. In January gas consumption dropped eight percent year-on-year, Oilru.com reports.
The price disparancy is the result of Russian authorities’ agreements with the power generators, newspaper Nezavisimaya Gazeta reports.
The energy companies have long demanded higher tariffs in the domestic market in order to boost profits. The higher incomes are necessary for the implementation of necessary investment projects, the companies argue. Russian energy tariffs have long been far below the price level in other countries. Now, however, the higher tariffs have become a major element of dissatisfaction both among consumers and for the energy-consuming industry and could potentially trigger unrest.
Analysts say to NG.ru that the government might eventually have to end up making all parts happy – leaving the tariffs at a lower level and help the energy companies invest in new projects.
