Rada Against Gas And Electricity Price Hikes For Households.

The Rada issued a decree demanding that the Cabinet observe the moratorium on the increase of gas tariffs for households and the heating industry. In addition, the Rada recommended that the Cabinet take measures to prevent the increase of electricity tariffs for households. Concorde Capital: The government has already approved the NERC’s decision to increase residential tariffs for gas by 25% and for electricity by 20% in 1Q06. The increases are not due to the expected jump in gas prices, but rather are due to the government’s decision to stop cross subsidization of residential tariffs to the determent of industrial consumers (refer to our news of 30.12.2005). The moratorium will like halt the growth in residential gas tariffs, but will not deter the increase of electricity tariffs. Before being sacked Prime Minister Yekhanurov stated that the government decided not to raise gas prices for households by 25%, as it planned previously. We interpret this as a forced move in favor of populist manifests by certain political forces in the parliament on the eve of parliamentary election s in March.