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New tariffs: Manufactured goods from Kyrgyzstan to become unattractive

«The new medium-term tariff policy is unprofitable for the consumers of the industrial sector, because the change in tariffs will increase in the cost of goods. This will make the products unattractive,» the Deputy Minister of Energy and Industry of Kyrgyzstan Tilek Aitaliev said at a press conference today.

According to him, the electricity tariff has always been socially oriented, but from the point of view of industry and economics, the Ministry of Energy has its own calculations and justifications for the increase in tariffs.

«Time marches on, inflation also keeps pace with the times. If there is any indignation, we are ready to discuss. But for my part, I can reasonably say that cost of those goods, for production of which we plan to increase tariffs, is increased anyway. Therefore, it is the issue from the point of view of the consumer,» Tilek Aitaliev said.

«Products can become unattractive given that manufacturers will be forced to maintain the same margins that are included in the cost of the product. I understand them perfectly, but we also understand very well that the situation is not easy for the population. We needed to find the middle ground when setting tariffs. To date, 62 percent of electricity in the country is consumed by the population. At the same time, in terms of the net cost, generation, transmission and distribution of our electricity, we also provided information several times. We are open to dialogue and ready to provide any figures,» he concluded.

Manufacturers opposed adoption of the current medium-term tariff policy. They noted that the state set too high tariffs for them. As a result, many factories can go bankrupt. At the same time, the industrial sector consumes only 10 percent of electricity. The main consumer is considered to be the population and the tariffs remain at the same level for them.

The draft medium-term tariff policy proposes to leave the tariffs for the population unchanged, but significantly increase them for the industrial sector. It is envisaged to increase the basic tariffs for non-residential consumers from 2.24 to 2.52 soms per kilowatt-hour, that is, by 12.5 percent, as well as to apply multiplying co-efficient of 1.3 and 2 for certain categories of consumers.

Experts are sure that such a tariff increase will not solve the strategic goals, that is, it will not reduce electricity consumption and water consumption during the winter season, and will not ensure significant additional income.