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On July 21, 2015, the President signed an Executive Order to disband the Federal Service for Tariffs and assign its functions to the Federal Anti-Monopoly Service.

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President of Russia Vladimir Putin: Mr Artemyev, how are you proceeding with your work on tariffs?

Head of Federal Anti-Monopoly Service Igor Artemyev: Thank you very much for asking, Mr President.

Six months ago with your Executive Order, you assigned the tariff regulating functions to the Federal Anti-Monopoly Service. I would like to inform you that the 2015–2016 tariff campaign has been completed. I believe it very important for the Government in general and the Federal Anti-Monopoly Service that we managed to keep up with the tariff calendar, meaning that all tariffs were set in full in a timely manner.

However, most importantly, I would like to make a brief presentation on the systematic changes in our tariff policy. In the current complicated conditions that the country is living in the tariffs are set in such a way that they are actually much lower than the inflation we had in 2015.

This means that inflation adjustment alone leads to a situation whereby tariffs are targeted at the citizens, the consumers and the entire Russian economy, Russian business, rather than in favour of national champions – public infrastructural companies, that have generally been doing well lately.

(Further Mr Artemyev gave specific examples of tariffs being adjusted only for inflation, among them gas, electricity and railway transportation tariffs)

This means that the infrastructural companies themselves, as we believe, will not find themselves in dire straits, they will have enough money to invest, they would only have to keep within means. We will monitor the price they pay for fuel, electricity and construction materials by using comparative analysis: by checking the prices Gazprom, for instance, pays for the same construction materials for its investment programmes and for their own needs.

I believe that cost saving, which we simply cannot do without now, should be formulated by means of a special programme for these infrastructural monopolies. Thus, we have developed such a programme for the Russian Railways.

This is primarily an anti-inflation measure. Second, for the first time in years, tariffs are growing slower than inflation, and I believe, Mr President, that this should become our long-term policy.

Generally, we are ready to move on to tariff formulas to achieve a planning range of about 5 to 7 years.

Vladimir Putin: This is very important.

Igor Artemyev: It is important for investment and for our overall economic development.

Thus, we could propose a formula that includes a 75 percent inflation indexation, and everyone would see that they need to cut costs. On the other hand, everyone would have a clear idea of their revenue and investment capabilities, and they could attract private capital by means of concessions and so forth.

Over the past six months, this approach has made it possible to literally reverse our tariff policy. We believe that we should make this policy long-term, clear and transparent through a number of Government acts – something the Government is now working on together with us and other regulators.

Generally, this was done on time, the ‘inflation minus’ principle has been introduced for the investment programmes I mentioned. We have done all the estimates, and double-checked them and where costs were inflated, we said it could be done cheaper.

Now the Government should make adjustments to investment programmes, which would also provide the companies with additional resources. However, this depends on the companies’ level; we cannot achieve anything here on our own.

It is important for heads of infrastructural companies to understand that now the economy will be not only for them – they had 10 years of very good development opportunities. Now they have to share their resources with all the others, with big and small businesses.

I would like to ask you to support this approach, if possible, primarily in regards to our major companies, the infrastructural monopolies. They should see that times have changed and they should change as well.

Vladimir Putin: They should know that we have made this choice and be ready, as you have said, to be slightly more modest, though not to the detriment of quality, timely maintenance work and so forth. I believe that if we wish to stifle inflation, this is the direction we should move in.

Igor Artemyev: Thank you, Mr President.

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