The influence of energy prices on the economy has increased

6 august 2014

In the new edition of the Energy Bulletin experts of the Analytical Center justified the impact of energy prices on the industry.

Experts believe that at the moment, when the scale of activity, distance, and unequal spread of energy resources has increased dramatically, the impact of energy prices on the economy has increased significantly. Therefore, it is crucial for the Russian economy to have a balance in interests between prices for households and industries, and the profitability of the fuel and energy complex at the given prices.

The experts paid particular attention to the issue of energy costs in the national industry. According to their calculations, prices for gas and electricity for industry in Russia are lower than in Germany and France, however, they are almost equal to the prices for natural gas in the United States and Canada, and electricity in the United States. Nevertheless the share of energy costs in the expenses of Russian companies is higher than those of foreign competitors in some economic sectors.

Also, the experts discussed the issues regarding the value of regulatory principles for gas and electricity markets. According to them, in order to enhance the competitiveness of Russian manufacturing industry the directions of fuel and energy policy should be specified clear and simple.

The experts believe that high energy prices may put at risk EU industrial development, especially its energy-intensive industries; therefore, searching for ways to maintain the competitiveness of European producers is timely and justified. According to the experts, the conclusions regarding the impact of “shale revolution” on reindustrialization of the United States are not too clear, and the fact of reindustrialization must yet be confirmed.

More information can be found in the bulletin “Economic effects of energy prices for the industry”.