Intense Development of Regions to Boost Affordability of Energy Resources for Public

5 september 2019 | Rossiyskaya Gazeta

The affordability of energy resources varies greatly from region to region and depends on per capita income in a particular territory, Alexander Amiragyan, Deputy Head of the Analytical Center's Department for Fuel and Energy Sector and Public Utility Services, told the Rossiyskaya Gazeta.

Alexander Amiragyan
Alexander Amiragyan
Department for Fuel and Energy Sector

"Gas and electricity tariffs for individuals in Russia are relatively low as compared with foreign countries, which allows virtually all regions to be sufficiently resourced. This is driven by, among other things, the existing benefits for certain categories of consumers, for example, retirees," the expert said.

However, according to him, in poorer regions power and gas costs "eat up" a relatively big portion of the aggregate income of households, thus considerably reducing their ability to spend money on other needs. This is mainly due to the outpacing growth of resource prices vs. individual income.

For example, the new energy bulletin of Analytical Center says that the past five years have seen a decline in the affordability of gasoline, natural gas, and power for individuals in Russia. Between 2013 and 2018, gasoline prices grew by almost 40%; power tariffs, by 33%. That said, per capita income increased by as little as 28% in nominal terms.

According to Mr Amiragyan, the number one solution to mitigate the difference between outsider regions and leading regions from the standpoint of energy resource costs is the outpacing growth of individual income in poorer regions. "This necessitates ensuring high economic growth rates, including by implementing large-scale investment projects and improving the investment climate," the expert explained. In his opinion, the examples of the Leningrad Region, Kalmykia and Adygea, where individual income grows due to the intensification of investment activity, can be viewed as a success.

Source: Rossiyskaya Gazeta