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Price liberalization will not hit household bills - minister

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MOSCOW, December 13 (RIA Novosti) - The industry and energy ministry said Wednesday that the liberalization of Russia's gas and electricity prices will not affect household utility rates, which will continue to be regulated by the state.

The government plans to gradually liberalize Russia's electric power market and natural gas prices to address domestic gas and power shortages.

"As far as household gas or electricity prices are concerned, they will remain in the regulated format, and liberalization reforms will not apply to them," Industry and Energy Minister Viktor Khristenko told the lower house of parliament.

Domestic gas prices are expected to rise from the current $45.30 per 1,000 cubic meters to $110-$120 in 2010, and to $130-$140 in 2015, compared with an average price of $230 per 1,000 cu m charged by energy giant Gazprom for its exports to Europe.

Domestic wholesale customers currently pay $40 per 1,000 cubic meters of gas, compared with a flat rate of about 20 rubles ($0.76) per adult resident per month paid by Russian households.

Russian electricity monopoly Unified Energy System charges an average of 1.6 rubles (6 cents) per kilowatt hour for electricity supplied to households.

Khristenko said the reforms were aimed at developing the basic infrastructure, and the country's economy as a whole.

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