Russia seeks monopoly price caps to trim inflation

[pms]

What kind of growth in wages is Russia experiencing?  Also what's the deal
on the new tax on oil?  Read about it in financial press.  Mentioned in
passing almost.  Also saw articles commenting on the end of export fees on
metals.  Are these significant things over there?  And while I got you
Chris, has anyone expressed opinion that Putin is helping keep US economy
afloat with Russian oil??  I was a bit taken aback by the PPI today and
partly because it seems that with the dollar weaker oil would be more
expensive.  Or something like that.
----- Original Message -----
From: ChrisD(RJ) <chrisd at russiajournal.com>
To: <lbo-talk at lists.panix.com>
Sent: Thursday, June 13, 2002 9:40 AM
Subject: Russia seeks monopoly price caps to trim inflation


> Russia seeks monopoly price caps to trim inflation
>
> MOSCOW, June 13 (Reuters) - Russia should keep a tight grip on price hikes
> by natural monopolies so than it can nearly halve inflation by 2005, the
> Economic Development and Trade Ministry said on Thursday.
>
> The government has largely blamed last year's 18.6 percent inflation rate
> on rate hikes by the gas and power utilities and the transport sector
which
> complain about subsidising the rest of the economy through low domestic
> prices.
>
> Russia is shaping its 2003 draft budget which assumes that consumer price
> rises should ease to 10-12 percent next year from a forecast 12-14 percent
> this year.
>
> Inflation should continue falling by another two percentage points in 2004
> and reach 6-8 percent in 2005.
>
> "To secure such dynamics of inflation, the rise of prices and products of
> natural monopolies should not lead to a consumer price rise of more than
> three to four percentage points a year," the ministry, charged with the
> country's economic growth, said in a statement.
>
> Russia is working on an overhaul to its power and gas industries, which
> completely dominate the economy. But the domestic price rise, seen as
> inevitable for the industries' cost efficiency, makes the issue
politically
> sensitive.
>
> Russian President Vladimir Putin had told powerful natural monopolies to
> put their houses in order instead of heaping price rises on the country's
> hard-pressed consumers.
>
> "Taking into consideration the macroeconomic restrictions in 2003-2005,
the
> price rise on gas of no more that 25 percent per year would be
> appropriate," the statement said.
>
> The annual price rise on electricity should be capped at 15-18 percent,
and
> railway price increases should match inflation rates, it added.
>