Public utilities tariffs growth in the regions

April 22, 2016 18:33

Public utilities’ tariffs for the population are formed centrally. However, the cost of services may vary significantly depending on the organization. The difference between the cost of housing services and tariffs for the population is offset by state budget subsidies.

The cross-subsidies system, against the background of lack of competition and social control results in a significant increase in the utility services’ costs, inter alia, due to corruption. Recently, communal services have invented schemes to compensate their expenses at the population’s cost. This practice is common for most regions. As a rule, communal services compensate their expenses by overcharging for heating. The government is incapable of reforming the housing utilities system, and in practice carries out only personnel shifts.

Since early 2013 public utilities’ tariffs have increased insignificantly. On June 1st, there was a 16%-increase in electricity tariffs.

All in all, since early 2013 the overall costs of public utility services increase by 10-20% on average, depending on the apartment size, number of residents and usage intensity. Bearing in mind June rise in electricity tariffs, the utilities bill in June will increase by 4-6% and will ‘offset’ increase in salaries and pensions.

According to the new Housing Code, took effect on March 2nd, an inhabitant may be evicted if, for instance he or she failed to pay utility bill for six months without a good reason. As of May 1st, 2013 there are 18.7 thousand homeowners who have a six-month debt payment for housing and utilities. In general, on May 1st, 167.9 thousand people had overdue utility payments (5.7% of the population), and 30.4 thousand (1%) are considered malicious non-payers.

In January-April 2013 municipal organizations filed 4.2 thousand complaints to the courts to recover debt of circa BYR 3.6 billion. Other means are used as well, for example, ‘Minsk City Housing’ State Production Association posts debtor’s lists on message boards. Association’s staff regularly phones debtors, recommend them to make payments on time and reminding them to repay debts.

Currently, authorities assess that the population pays no more than 30% of their housing utility costs.