SERGEY PUZYREVSKIY: RUSSIAN ECONOMY LACKS FUNDAMENTAL LAW DEFINING GENERAL PRINCIPLES OF TARIFF REGULATION
Deputy Head of FAS Sergey Puzyrevskiy presented position of the competition authority on developing the law on state regulation of prices (tariffs)
On 17 May 2019, the programme of Petersburg International Legal Forum - 2019 included the “Tariff regulation in Russia” session. Its participants discussed strategic issues of tariff regulation for the coming years. The key focus was, in particular, on current price regulation, mechanisms stimulating regulated entities to enhance performance, improvement of control-and-supervision efforts in tariff regulation, and synergy with the antimonopoly law. The session was moderated by Head of FAS Tariff Regulation Department, Yulia Yudina.
“After tariff regulation powers were transferred to FAS, we analyzed the normative framework and found that this sector is regulated by more than 150 regulatory acts. The main concerns include tariff discrimination, unreasonable overrating of tariffs, non-transparent regulation. To execute the orders of the President and Government of Russia, we undertook robust law-making efforts and drafted a law on the fundamental principles of state regulation of prices (tariffs)”, said Sergey Puzyrevskiy.
The draft law formalizes a list of regulated areas, specifies common goals, principles, forms and methods of state regulation of prices (tariffs), introduces the basic provisions on investments activities of the regulated entities, and gives the main procedures for setting regulated prices (tariffs).
The main principles of state regulation of tariffs certainly include comparison (benchmark costs), setting prices (tariffs) on the basis of their economic reasonableness, observing the balance of economic interests of regulated subjects and consumer interests, and continuity of tariff (prices) setting.
“Currently, the planning horizon often is no more than 1 year, and every year we come back to reviewing tariffs, although we need stability. The draft law provides for long-term tariff setting without additional revisions so that consumers can understand how much they will pay”, explainedSergey Puzyrevskiy.
The draft law sets a norm that consumers will be able to take part in discussing tariffs.
Sergey Puzyrevskiy informed that “subjects paying for services must be able to influence tariff decision-making. We believe that consumers have the right to express their opinions and the regulator may consider them when making a decision. The format and the procedures of such collaboration will be determined by the Government”.
Summing up, Deputy Head of FAS underlined that the system of control over tariff regulation also needs changes. To this end, competences and powers of the authorities of all levels will be reviewed.
“It is essential for us to not only ensure control over regulation but also protect the rights of consumers and organizations so that all parties can defend their interests”, highlighted Sergey Puzyrevskiy. “We live in the conditions of the market economy, which presumes state regulation of prices in certain spheres and we lack a law that would determine the general principles of such regulation in the field of tariffs. The draft law will lay down the foundation of tariff regulation”.