7 Jan 2002 – The Belarus government has introduced cross-subsidization of electricity costs which could lead to a 40 per cent rise in prices paid by domestic customers, in an attempt to ease the heavy burden on industry, according to energy minister Uladzimir Syamashka.

The minister’s remarks were made at the first press conference given by Mr Syamashka in his new post and were reported Friday on the Belarusian newspaper Vecherniy Minsk web site.

Much of Belarusian industry is in debt and is increasingly feeling the burden of utility charges. For many enterprises energy costs are second only to taxes. Figures from the Minsk City statistical office reveal that at the beginning of November, 905.3bn Belarusian roubles ($573m) was owed for energy resources alone, with more than half of this debt owed by industry.

The minister said that it was difficult for industry to compete effectively with Russia when energy costs much less there than it does in Belarus. He said, “A new blueprint for cross-subsidization by electricity and heating consumers has been adopted in Belarus recently. Its main point is that energy charges for households should be raised by 40 per cent by the end of the first quarter of the year that has begun, which has already been reflected in the 2002 state budget”.

Critics of the increases are concerned that the government should first introduce fair rates of pay before adding to utility bills if poverty is to be avoided.

Syamashka said, “Of course, it is difficult for people with their 100-dollar average [monthly] wages to accept the new charges. However, let us look at how we consume electricity and heating – we consume it wastefully. Until people have learnt how to calculate and pay for energy properly, no energy-saving programmes will work”.

“The ministry policy will be aimed at relieving enterprises of the energy burden, and on the other hand, at setting reasonable and acceptable utility charges for households”, said the minister.