At the Government meeting, measures taken to fulfill the instructions of the Head of State, given at a meeting of the Security Council Nov. 7, 2018, regarding the reduction of tariffs and prices for socially important food products were considered. Prime Minister Bakytzhan Sagintayev gave a number of specific instructions for further work.

Minister of Energy Kanat Bozumbayev reported that the instructions of the Head of State, given by the Security Council Nov. 7, 2018, were fulfilled by the Ministry of Energy. After the analysis and hearing of all energy producing organizations, Dec. 14, 2018, an order was adopted approving the limit tariffs for electric energy. In accordance with the instruction of the Head of State, objective levels of marginal tariffs for electric energy have been established for groups of energy-producing organizations. Bozumbayev noted that each energy producing organization is defined in one of 43 groups.

According to the ministry, with the adjusted value of the tariff for capacity, the first centralized trading in electric capacity in Kazakhstan was held. As a result of trades, a reduction in the price of capacity was obtained by 9% of the maximum value of the tariff for capacity.

“The cost of electricity from energy producing organizations in terms of the sum of the two components (comment of the cost of electrical energy and the cost of power) will not exceed the level of the current marginal tariffs for electrical energy,” said Bozumbayev.

According to the results of the calculations made, the measures taken will allow to reduce the final prices for electricity in Kazakhstan from Jan. 1, 2019.

The Ministry of Energy has approved an Order providing for the reduction of marginal wholesale prices for marketable gas for a fuel and energy complex for the generation of heat and electrical energy. Based on the reduction of marginal wholesale prices for gas, by the Committee on the Regulation of Natural Monopolies, Protection of Competition and Consumer Rights. The ministry will take orders to reduce retail gas prices for fuel and energy complexes.

“The reduction of marginal wholesale prices will allow to reduce the final prices of marketable gas from Jan. 1, 2019 for fuel and energy complexes to generate electricity from 12 to 23%, depending on the region,” said Bozumbayev.

Minister for Investments and Development Zhenis Kassymbek, in turn, reported on the current pricing situation and the work being done to reduce the cost of coal. In the total amount of coal shipment for the population of about 70% is provided by the Shubarkol and Karazhyrinskoye deposits. In this regard, together with the Association of Mining and Metallurgical Enterprises, a draft memorandum was developed, which was sent to akimats for conclusion with coal distributors, and workshops were held to reduce the selling price of coal for the population with traders.

According to the results of the joint actions carried out by all akimats of regions and cities of republican significance, relevant memorandums have been concluded to date. In general, akimats and traders concluded about 90 memorandums.

“From November 2018, as part of the implementation of the signed memorandums until the end of the heating season, the cost of Shubarkol coal is reduced by an average of 15-20% and Karazirin coal by 5-10%,” said the Minister Kassymbek, noting that in the regions of the country the selling price of coal for the population is reduced on average from 5% to 21%.

Minister of National Economy Timur Suleimenov reported on measures to reduce tariffs for electricity, coal, heat, water, gas, sewerage, telephone, Internet, elevator maintenance, garbage collection.

With regard to short-term measures, from Dec. 11, 2018, in all regions, work has been organized to establish feedback with the population. According to the results, 102 public receptions were held. Hotline telephones are organized for consumers who do not have the opportunity to attend public reception rooms.

In the sphere of heat supply, tariffs for heat for the population have been reduced in three regions: in Akmola, North Kazakhstan, and East Kazakhstan. In addition, from Jan. 1, 2019, tariffs for the population are projected to decrease from 2.2% to 15.3%. As a result, the savings of public funds for heat supply services will be about 6 billion tenge.

In the field of water supply, the water tariff for the population in the Zhambyl region was reduced by 22%. In addition, from Jan. 1, 2019, tariffs are projected to decrease in the remaining 16 regions from 3% to 27%. The tariff for water disposal is reduced in the Zhambyl region by 0.4%. In addition, from Jan. 1, 2019, tariffs are projected to decrease for the population in the remaining 16 regions from 3% to 11%. Saving of water and wastewater will be more than 2 billion tenge.

Of the 11 regions provided with gas, a decrease in gas prices for the population is projected from 3.3% to 17.5% in 9 regions. As a result, the savings of public funds for gas supply services will be about 5 billion tenge.

Electricity prices were reduced in the Zhambyl region by 3.6% and in the Kyzylorda region by 4%. The forecasted decline in retail prices in other regions from Jan. 1, 2019 will be reduce from 1.7% to 23%. Retail electricity prices for legal entities in eight regions are also expected to decline from 1.7% to 8%. In general, consumer savings for electricity services will be more than 14.5 billion tenge.

The total savings by consumers for utilities, following a tariff reduction, will be about 28 billion tenge.

Along with this, according to the information provided by akimats of the regions, it is planned to reduce tariffs for utility services from 2.2% to 20%, for garbage collection – from 2.1% to 24.7% and for elevator services – from 3% to 50%.

As for medium-term measures, in order to enhance the transparency of tariff formation, as well as to monitor the execution of tariff estimates and investment programs by monopolists, two sets of amendments to the Legislation have been prepared.

The first package of amendments within the framework of the draft law “On Natural Monopolies” on Dec. 20, 2018, was approved at a plenary session of the Senate of the Parliament and will soon be sent for signature to the Head of State. The second package of amendments aimed at strengthening the mechanism for conducting monopolies' inspections and requiring changes to the Business Code is provided for in the draft law on the development of the business environment and regulation of trading activities, which will be considered at a meeting of the Majilis on December 26 .

In addition, Suleimenov reported that the change in prices for socially important food products was insignificant compared to the last week. Thus, as of December 21, threshold values ​​were observed in almost all regions for two items of goods – cabbage and sugar. According to the data of the Ministry of National Economy, there are objective reasons for the rise in the price of sugar: its prices are growing under the influence of global trends in the sugar market. At the same time, according to the Minister of National Economy, the reasons for the increase in prices for certain types of goods were the result of poor coordination at the level of local executive bodies and can be resolved at the level of akimats. For example, the reasons are the lack of production or storage facilities.

Following the consideration of the issue, the Prime Minister Bakytzhan Sagintayev noted that all Kazakhstanis should feel the result of the execution of the Head of State’s instructions. Akims of the regions together with the Ministry of National Economy have been entrusted until Jan. 1, 2018, to make appropriate decisions to reduce tariffs for services and other utilities administered by akimats.

It is indicated that from Jan. 1, 2019, all service providers must strictly follow the approved reduced tariffs, and their education should be as transparent and understandable as possible to the public.

In addition, it was noted that the rise in prices for a number of food products is not justified. In this regard, the Ministry of National Economy needs to take control of the issue of ensuring the stability of food prices, including fruit and vegetable products.

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