Our tariff policy can be efficient only when it is connected to market development plans

The statement was made by Deputy Head of the Federal Antimonopoly Service (FAS Russia) Anatoly Golomolzin at the II International Research-to-Practice Conference on “Antimonopoly Policy: Science, Practice, Education” on 6 December 2016.

According to Anatoly Golomolzin, tariff regulation under the “costs plus” principle proved to be inefficient: such tariffs become an excessive burden for the economy. “Regulation that we now apply is based on market analysis. It allows us to use different approaches in tariff setting, apply flexible tariff schemes, and deregulation. When it concerns tariff setting, we typically are guided by the “inflation minus” principle and the methods of long-term tariff regulation, determined by long-term investment programs in infrastructure facilities, the lifecycle of which can be 30 - 50 years. On the other hand, we are oriented to long-term tariff regulation, associated with structural reforms in the relevant fields of activities”, said Anatoly Golomolzin.

He emphasized the need to employ modern methods of tariff regulation that would enable to not only protect consumer interests but also support development of regulated companies.

“To this purpose we need to use the experience accumulated by the antimonopoly bodies through various aspects of our work. Earlier we already regulated tariffs for telecommunications and transport. FAS competences include control over observing the Rules of non-discriminatory access to services of natural monopolies; and procurement by natural monopolies and companies with state participation”. For 25 year all decisions have been made based on market analysis”.

FAS has established two institutions. The Methodological Council discusses the basic issues of tariff regulation and has a number of sectoral Groups that discuss, jointly with the expert community, tariff regulation methodology in various fields of FAS work. There is also the Exchange Committee to form modern pricing mechanisms through organized trading.

“Employing all these tools we intend to implement mechanisms of stimulating tariff regulation that form our new tariff policy”, stated Deputy Head of FAS.