Igor Artemiev outlined the prospects of tariff regulation for the next few years
Head of the Federal Antimonopoly Service (FAS Russia) Igor Artemiev focused his report on 17 October 2017 at the workshop on “Tariff regulation in 2017 and regulators’ objectives for 2018 – 2025” in Crimea on the results and prospects of tariff regulation.
According to Head of FAS, the synergy principle brought the methods, traditional for antimonopoly regulation to tariff regulation. It includes, first of all, benchmarking (comparative analysis of prices on compatible markets) applied as a priority in contrast to the costs method.
Igor Artemiev stated that the concept of a draft Federal Law “On government regulation of prices (tariffs) in Russia” is approved at a meeting chaired by 1st Deputy Chairman of the Government of the Russian Federation, Igor Shuvalov. “The text of law will be changing unrecognizably upon its broad discussions with businessmen and social organizations, but the framework will remain the same – it shall form the basis of tariff regulation in Russia and will have sectoral Chapters. We also plan to reject the current definition of natural monopolies, formalizing in the definition that only network assets can be natural monopolies”, considers Igor Artemiev.
In his view, the present definition of natural monopolies restricts a transition from the market of natural monopoly to a competitive market. “The experience of deregulating stevedores was unsuccessful because many stevedores immediately and unreasonably increased prices for their services. We may bring them to their senses applying antimonopoly remedies. There are judicial proceedings and we hope to win over stevedores”, said Igor Artemiev.
Head of FAS informed that consultations are being conducted between the Government and the President’s Office concerning a Presidential order that shall approve the “National Competition Development Plan”.
According to Igor Artemiev, there are no discrepancies in terms of the essence of the National Plan and the measures proposed by FAS. The discussion is about a normative legal act to approve it: should it be a Presidential Order or a mandate. The “National Competition Development Plan” covers, in particular, tariff issues.
Head of FAS presented experiences of implementing the Standard for developing competition in the regions. The progress varies by provinces. Thanks to the Standard, however, private municipal carriers, pharmacies and pre-school institutions are emerging in the regions.
For instance, 50% of transport organizations in Moscow are private. They put pressure on the costs of state transport companies and compete on par with them.
Head of FAS confirmed that regional Energy Commission shall not be integrated in the system of antimonopoly bodies but FAS will be able to abolish their unlawful decisions or make tariff decisions in case of omissions by regional regulators.
Igor Artemiev underlined that FAS has drafted regulatory acts to close the “gaps” in the tariff law. Now the tariff regulatory system at regional and local self-government level allows setting tariffs much higher than the maximum specified by the Government. “Upon adopting the relevant acts, drafted by FAS, tariffs can get above the maximum in the regions only if a local parliament passes a special law in order to implement investment programmes” explained Igor Artemiev.