Russian Ministry of Energy doesn’t want to decelerate inflation with gas

Six weeks before the planned term of making tariff decisions for 2016 Ministries disagreed on indexation of a single tariff, on which the consensus previously was. The Ministry of Economy has proposed to increase the price of gas for industry by 5% instead of 7.5% to contain the inflation, but the Ministry of Energy opposes. The attitude of the now key tariff department – the Federal Antimonopoly Service of Russia - is unclear. At a lower indexation Gazprom may receive by about 16 billion rubles less, the growth of income of coal mining and power generating companies will also slow down.

The Ministry of Energy opposes the idea of the Ministry of Economy to slow down the rate of the indexation of the gas tariffs. In spring, it was previously agreed that the gas prices for industry and households will be increased by 7.5% in the middle of 2016. But last week, the Economy Ministry proposed to reduce the indexation for the industry to 5% in order to contain the inflation. "We don’t support this proposal. We believe that it is necessary to go in the way, at which we were going to," - said the deputy head of the Ministry of Energy Alexei Teksler on Friday. The low indexation "will immaterial improve the situation in the inflationary processes, but will significantly reduce the investment potential" of gas companies, he said.

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