Why is this important
The 15% increase in tariffs for the population will increase utility payments and hit family budgets during the heating season. A 40% increase in prices for businesses will increase business costs and may lead to price increases for goods and services. Abandoning subsidies by 2030 means a further increase in tariffs in the coming years.
What happened
- Tashkent Mayor Shavkat Umurzakov approved the increase in heating tariffs on October 27;
- For the population, an increase of 15% to 139,860 soums per 1 Gcal (excluding VAT);
- For businesses (wholesale consumers), an increase of 40% to 342,296 soums;
- The base tariff increased by 7% to 711,641 soums;
- For budget organizations — 952,797 soums per 1 Gcal.
New rates
*Prices listed without VAT
Veolia Justification
Гендиректор Veolia Energy Tashkent Севара Пардаева на заседании Кенгаша 12 августа объяснила необходимость повышения тарифов:
- Plans to abandon subsidizing the heat supply sector by 2030;
- Increase is required to cover the real cost of services;
- Freezing tariffs at the current level will lead to a sharper increase in the future.
The company also announced plans to gradually increase tariffs for businesses to the level of budget organizations. This will reduce cross-subsidization and equalize prices with other consumer categories.
Context
Tariff increases are part of the strategy for liberalizing utility services and abandoning subsidies. The state is gradually transitioning tariffs to market levels to ensure the financial stability of heat grid operators.
For the population, a 15% increase means an increase in utility payments by approximately 20-30 thousand soums per month during the heating season (for an average apartment). This will hit family budgets, especially considering inflation (8%).
For businesses, a 40% increase will significantly increase the costs of enterprises, office buildings, and shopping centers. This can lead to price increases for goods and services or staff reductions to compensate for expenses.
The base tariff (+7%) is a moderate increase reflecting inflation and rising costs for fuel, network maintenance, and salaries.
Cross-subsidization: now businesses and budget organizations pay more than the population, subsidizing low tariffs for citizens. Veolia plans to gradually equalize tariffs for businesses and the budget, which means further price increases for businesses.
The rejection of subsidies by 2030 means that the population will pay the full market price for heating. This could lead to tariffs increasing 2-3 times over the next five years. This practice is common in developed countries, but it requires gradual adaptation and social protection of vulnerable groups.
Veolia Energy Tashkent is a French company that has been managing the heating networks of Tashkent since 2019. The company invests in network modernization, but requires increased tariffs to cover costs and ensure profitability.
Tariff increases can cause discontent among the population and businesses, especially under conditions of high inflation. The authorities should ensure transparency of settlements and social protection of low-income families through subsidies or benefits.
