SETTING GAS TARIFFS WAS AMONG THE BEST ACHIEVEMENTS OF THE FUEL-AND-ENERGY DEPARTMENT IN 2017
Due to a pro-competitive tariff policy, in 2017 the tariffs in the gas sector, from all natural monopolies, were indexed less that specified in the forecast for social-and-economic development (SED forecast)
The tariffs were reviewed, in particular, to exclude economically unreasonable income of regulated entities and reducing cross-subsidizing.
Unlike other sectors of natural monopolies and the housing-and-utility sector, tariffs in the gas sector are based on evaluating economic trends rather than parameters formalized in SED forecasts.
The main gas consumers are companies offering heating and electric power supply services. The gas costs is an element of the tariffs form these companies.
Gas prices were not indexed in 2016 under SED forecast, and FAS reduced some prices (tariffs). It should be taken into account setting prices in the heat and electric power industry under the frame of the pro-competitive tariff policy, particular, excluding the excessive income from tariffs that was generating but non-indexing gas prices.
Tariffs for gas transportation via gas–distribution networks are long-term (3 years). Earlier established tariffs that have not expired were not reviewed in advance due to a decreased scope of services offered and companies’ losses caused by goods shortage and other factors. This approach facilitates favourable investment climate.
Regulating gas tariffs, the main approaches of a pro-competitive FAS tariff policy are taken into account. Regulators consider benchmarks on the main costs items - “maintenance”, “diagnostics”, “outsourcing services”, “quantity standard”, “capital repair costs”, etc., per 1 km of gas pipeline, which eliminates discrimination in tariff regulation.
The “inflation minus” principle is considered to index the main costs items, i.e. items were indexed lower than the inflation level.
In 2017 tariffs for gas transportation services via the main gas-distribution pipelines-branches now owned by “Gazprom” OJSC. The tariffs have been reviewed, particularly, to exclude economically unreasonable income of regulated entities and reducing cross-subsidizing.
For instance, tariffs for gas transportation services via the main gas-distribution pipelines-branches in Ingushetia were reduced by more than 22 times.
“As a result of this approach, unreasonable costs of some regulated organizations were excluded. For example, reviewing the tariffs for gas transportation services for a gas distributor in the Omsk region * FAS exposed and excluded a three-fold overrun of earlier included costs above the actual economically justified costs. The average reduction of the prices for gas distribution and logistical support services was 15%. Cross-subsidizing between consumers also was reduced”, pointed out Head of FAS Department for Regulating the Fuel-and-Industry Complex and the Chemical Industry, Dmitry Makhonin pointed out.
Thus, general reduction of the tariffs (an increase not exceeding SED forecast) for gas supplies had a positive synergy effect upon adjacent energy markets when gas is used to generate energy resources.