Ahead of inflation allowed only one utility tariffs

Cumulative payment of the population for utilities in 2017 and subsequent years should increase by the value inherent in the forecast of the inflation rate to 4%, writes “Kommersant” with reference to the updated forecast of socio-economic development of Russia in 2017-2019, prepared by the Ministry of economic development.

At the same 4% rise in average heat tariffs, and the indexation of gas prices is proposed in 3%. According to the forecast, the faster inflation will rise only in electricity tariffs for the population by 5%. The Ministry told the newspaper that the government will consider the document on October 13.

In the previous version of the baseline forecast, released in September 2016, the Ministry proceeded from the assumption that in 2016 inflation will be 5.8%, in 2017 – 4.9% and in the next two years will decrease to 4.4% and 4.1%, reaching the target set by the Central Bank. However, how to write “Vedomosti”, the inflation forecast for all three years were adjusted after a meeting of the budget Committee from the Ministry was required to match the Central Bank target of 4% in 2017. As a result, in the October option, provided that, in the next three years stabiliziruemost inflation at 4%.

The last time the tariffs for housing and communal services in Russia increased on 1 July 2016. The average increase in fees amounted to 4%. Rising prices touched the tariffs for water, electricity, heat and gas. Prices for housing services, which include local area and current repair of the common property and porches, are governed by management companies.

According to Rosstat, in the first week of July the price of “communal” increased the national average by 3.4 to 5.5%, while tariffs for heating increased by 3.4% to cold and hot water, 3.7 and 3.9%, electricity by 4.8%. The cost of Sewerage jumped by 5.5 per cent. This led to a jump in consumer prices. Per week (from June 28 to July 4) retail prices for goods and tariffs for services grew on average by 0.4%. Over the past eight weeks, inflation in Russia did not exceed 0.1%, down one and to zero.

“Kommersant” notes that the increase in electricity prices for the population faster than inflation can reduce cross-subsidization, when low social considerations covered by the tariffs increased the cost of industrial consumers. According to the head of Ministry of energy Alexander Novak, in 2015 the total volume of cross subsidizing in the power sector reached 238 billion rubles, but by 2022, its volume is expected to decline to 45-50 billion rubles.