Rising gas prices have pushed non-controlled electricity prices up 50-70 percent, and they will stay at that level for the rest of the year.
Photo: Ivan Grankin
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Electricity Powers Inflation
Rising gas prices have pushed non-controlled electricity prices up 50-70 percent, and they will stay at that level for the rest of the year. The average price for electricity on the Independent Power and Capacity Market Operator (Russian abbreviation NOREM) was 1143.44 rubles per megawatt-hour yesterday. A record was set on the exchange January 9, the first work day after the New Year's holiday, when the price reached 1205.37 rubles. The previous record, 1043 rubles, was set in August of last year.
Analysts warn against dramatizing the situation. They attribute the price rise to a 25-percent increase in gas prices at the beginning of the year. Natural gas contracts for January were selling for $100 per 1000 cu. m. on the Mezhregiongaz electronic trading system in December. The second cause of the increase is the inclusion on the market of more generators using fuel oil, which is more expensive than natural gas. That factor is expected to be temporary, subject to changes in accounting practices and tougher antimonopoly regulation. The cold weather in Tyumen and the Urals was also mentioned as a factor in electricity price growth, as were details in the method of trading on the free exchange.
Analysts agree that electricity prices will be higher this year than last, but lower than they were last week. Those prices will be felt in the inflation rate before the end of them month.
www.kommersant.com
All the Article in Russian as of Jan. 15, 2008
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