Anatoly Golomolzin: we are capable of creating a sustainable tariff regulation system in Russia

The basic tariff regulation principles are already established and market analysis plays the major role

Deputy Head of FAS Anatoly Golomolzin made the statement in the course of a tariff regulation discussion at the VIII Annual Conference on “Antimonopoly Regulation in Russia”.

According to him, the new tariff policy provides for step-by-step shifting away from the “costs plus” principle to the “inflation minus” in view of stimulating regulation designed to enhance corporate efficiency and develop investment activity. All decisions on introducing, changing, terminating tariff regulation will be made on the basis of market analysis. “Where competitive markets are at the stage of establishing, we intend to pursue flexible tariff policy, which comprises tariff corridors, benchmarks, etc. If competition on a market is sufficiently developed we will apply tariff deregulation”, said Anatoly Golomolzin. Deregulating Moscow aviation hub is an example of such decisions.

Deregulating pipeline transportation of oil products is being discussed; a market survey shows that the share is 12%. Competition is sufficiently developed on this market, and consumers have a possibility to choose suppliers so there is a need in deregulation.

Anatoly Golomolzin pointed out that deregulation does not mean lack of accountability. The regulator will mandatory monitor prices and “Transneft” will still be in the Register of natural monopolies where remedies of antimonopoly control are preserved.

Deregulation of oil product transportation by railways is also under discussions. Wholesale gas price can be deregulated in 2018. FAS is actively studying the issues jointly with experts and market players.

It is expected that two legislative acts will be changed: the Federal Law “On Protection of Competition” will formalize the basic principles of tariff regulation and all major definitions and concepts; and the Law “On Natural Monopolies” will be abolished.

“Along with amendments to the Federal Law “On Protection of Competition”, the Law “On the Basic Principles of State Regulation of Prices (Tariffs)” will be adopted to unify approaches to tariff regulation, and detailed regulation of all procedural aspects of such activities will be specified”, explained Deputy Head of FAS.

A particular decision-making procedure should match each method of tariff regulation. For instance, a transition for long-term tariff regulation is provided using the rate of return method. Long-term development programmes and investment programmes segmented by investment projects with relevant execution control will be adopted.

Summing up his speech, Anatoly Golomolzin said: “We wish to develop new methods of tariff regulation, form sustainable, unified practice and we are capable of doing it”.