Experts discussed the creation of common energy markets within the framework of the Eurasian Economic Union

17 july 2014

On July 17 2014, Analytical Center hosted the roundtable titled “The creation of common fuel and energy markets within the framework of the Eurasian Economic Union".

Opening the event, the Head of the Department for Strategic Studies in Energy of the Analytical Center Alexander Kurdin, reminded his colleagues that in May of this year Russia, Belarus and Kazakhstan signed an agreement establishing the EAEU, which will enter into force on 1 January 2015. According to the document, States commit themselves to guarantee the free movement of goods, services, capital and labor within their borders. “In this regard, we have a whole range of issues, - the expert continued. - In the oil industry there are difficulties with foreign trade policy and price control, there are threats of jurisdiction shift for tax planning purposes and different approaches to foreign trade policy and taxation”. According to him, in the gas sector problems are associated with the model of the market, opening up the access to the gas transmission infrastructure, the methodology for calculating the cost of gas transit and transportation tariffs. “Also, there are certain nuances regarding the model of the electricity market and the harmonization of the regulatory framework, the development of coal balances and transport policy of the countries”, - added Mr. Kurdin.

The Head of the Scientific Department of the Institute of Natural Monopolies Alexander Grigoriev, noted that practical steps have already been taken in the creation of common markets, and the greatest progress, in his opinion, will be made in the development of the electricity industry. “In electricity industry, infrastructure plays a very high role, and integration sectors are already visible”, - he said. Markets are an important element of the development, however, according to Mr. Grigoriev, the main risk is associated with the networks, as their share has not yet being reduced. “In the network complex of these three states, there are different approaches to tariff formation and they have developed their own approach regarding the spending - the expert believes. - Therefore, if control over the activities of natural monopolies is not established, the efficiency and the full potential that exists, when creating common markets, cannot be achieved”.

Deputy Director of the Energy Department at the Eurasian Economic Commission Sergey Kolobanov, believes that we cannot rush into transferring all powers on to the supranational level. “Eurasian Economic Commission already has certain competences secured by the contract that it exercises - said the expert. - As for the rest, there is no need to rush”. According to him, first you need to create a clear structure, to develop a concept and to evaluate the effects. This is a serious scientific process, which will last for several years, believes Mr. Kolobanov.

Experts agreed that the creation of common markets in Russia, Belarus and Kazakhstan is a rather complex process, requiring a lot of time and hard work, but at the same time necessary for energy development of the countries.