Russian Duma Exposes Causes of Utility Price Surges: Cars, Corporate Events, and Business Trips

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Preview Russian Duma Exposes Causes of Utility Price Surges: Cars, Corporate Events, and Business Trips

State Duma deputies uncovered utility tariff increases up to 21% in various regions, sparking an investigation into the underlying causes.

Deputies of the State Duma revealed an increase in housing and communal services tariffs in the regions by up to 21%

Photo: Ekaterina Shlychkova

August utility bills have shocked not only ordinary citizens but also State Duma deputies. The relevant committee analyzed tariffs across the country and uncovered surprising facts. While the official explanation for rising heat and water prices refers to the Ministry of Economic Development`s forecasts, an in-depth investigation by deputies, in collaboration with the Federal Antimonopoly Service (FAS), revealed other underlying reasons.

Sergey Pakhomov, head of the committee, presented an analysis of tariffs nationwide, highlighting systemic problems behind the figures. His address at the plenary session on August 23rd was designated as «information,» yet it prompted serious reflection.

Across Russia, the average cumulative tariff increase was 11.9%. However, regional variations are significant, ranging from 8.6% in the Amur region to 21% in the Perm Krai. Utility companies generally attribute price hikes to the Ministry of Economic Development`s projections.

Pakhomov emphasized the lack of transparency in the Ministry of Economic Development`s forecasts, noting that calculation details are not publicly disclosed. For instance, resource-supplying organizations saw gas prices rise by 21.3% and electricity by 11.6%. This automatically led to a 7.9% increase in heating tariffs and a 2.5% increase in water tariffs, without accounting for other costs.

A significant imbalance was observed: gas tariffs for the public are half those for businesses, while electricity tariffs for the public are higher than for businesses. It was also noted that salaries in the housing and utility sector are 39% lower than in other key economic sectors. Pakhomov pointed to a complete lack of a systemic approach to tariff formation, resulting in illogical price dynamics – with sharp increases in some areas and reductions in others.

In July, deputies proactively requested explanations from the FAS regarding the legality of tariff increases in each region and initiated checks. Significant increases in cold water prices (30-40% compared to 2024) were recorded in the Belgorod region, Ingushetia, North Ossetia, and the Republic of Khakassia.

For hot water, the most notable increases (43% to 80%) occurred in the Vologda region, Magadan region, Udmurtia, and Chukotka. Tariffs for sewage also rose in the Magadan region, Ingushetia, and Kalmykia. Similarly, the Magadan region and Ingushetia showed high growth in heat supply prices. Record increases in solid waste removal tariffs were observed in the Krasnodar Krai, Perm Krai, and Mordovia.

According to Pakhomov, high prices are officially attributed to investment programs, adjusting tariffs to economically justified levels, or concessions. However, these explanations do not alleviate the burden on consumers.

Interestingly, some regions have, conversely, reduced tariffs. For example, the Nizhny Novgorod region lowered electricity tariffs by 24%, and the Orel region reduced cold water prices by almost 12%. The Republic of Tyva and Komi also saw reductions in hot water supply tariffs.

Following inspections, the FAS issued 94 directives to rectify identified violations, which have already led to tariff reductions in the Leningrad and Novosibirsk regions, Khakassia, the Altai Republic, and Altai Krai. From the approved regional tariffs, 25 billion rubles of unjustified expenses have already been excluded, with another 26 billion under suspicion. A tenfold increase in detected tariff overcharges was noted from 2.4 billion rubles in 2020 to over 26 billion rubles currently. The Prosecutor`s Office also identified approximately 6 billion rubles of expenses unjustifiably included in tariffs.

Pakhomov concluded that these unjustified expenses include costs for cars, corporate events, and business trips. He stated that tariffs are no longer dependent on budget support, which he deemed a negative factor.

Despite 424 billion rubles allocated from the federal budget for modernizing communal infrastructure between 2022 and 2025, the impact has been localized and limited. These funds also went to private resource-supplying organizations and concessions, among others. Pakhomov asserted that the inconsistent tariff policy reflects the poor state of the industry, where tariffs have become a virtual figure, not meant to stimulate system efficiency but to patch up dilapidated networks and cover losses from inefficient management decisions.