As Russians prepare for the annual summer slowdown, it’s not just the temperatures that are rising.

file photoJuly 1 sees a whole raft of price hikes – on everything from gas and electricity to vodka, petrol and water. The price rises, government critics claim, were timed to come into effect after the recent elections, and as Russians wind down for summer.

Household gas prices are set to rise by 15 percent, while prices for electricity, cold and hot water will rise by 10 percent and 6 percent, respectively. A second wave of price rises will happen in September, when cold water tariffs will become 4.5 percent more expensive, and heating and hot water will cost 5.6 percent more. The hikes are twice as high because prices stayed the same in January. “It’s obvious that no one would raise utility tariffs before the election,” said Irina Malikova, general director of Zhilkomaudit, a utility sector think tank. “That’s why the rise has been delayed and will come in two stages, so that it is not so rapid.”

Despite earlier promises from then-Prime Minister Vladimir Putin to keep tariffs steady, experts say the rise was inevitable. “Consumers should get ready for utility tariffs rising again, as the utility infrastructure is very worn out and needs investment, which so far can only be taken from consumers’ pockets,” Malikova said.

In another move to delay this year’s extra burden, heating bills will be payable only in winter in future, reducing summertime utility bills.

Motorists in Moscow and St. Petersburg will be hit by higher parking fines, some of which are being raised 10 times. From July 1, illegal parking will be penalized with a fine of 3,000 rubles ($100), with an extra fine of another 3,000 rubles if the car is towed away by the authorities.

Stopping within 5 meters of a pedestrian crossing will mean a fine of 1,000 rubles and stopping in a tunnel will result in a fine of 2,000 rubles.

Driving on bus lanes, which used to be penalized with fines of 300 to 500 rubles, will now be more expensive – 3,000 rubles for Moscow and St. Petersburg, and 1,500 rubles for other cities.

Getting tougher on motorists’ violations and encouraging the use of public transportation is key priority for Moscow Mayor Sergei Sobyanin’s administration. Along with the new fines for incorrect parking, City Hall has launched a transportation website, parking. mos.ru, indicating the location of parking lots and the number of parking places in them.

But motorists say there are not enough parking spaces in the city, and the new fines will simply cause more traffic jams and more corruption.

“It’s now more important not to keep hiking the fines but to make them work,” said Sergei Kanayev, leader of the Federation of Russian Motorists. “For the time being, the police haven’t been bothering to control the implementation of all those traffic rules. Moreover, there is no alternative – the city authorities confess that they can’t provide more than 15 percent of parking spaces needed. This makes 85 percent of drivers illegal. It all seems to be being done to clear the roads for officials, who have been deprived of their migalki.”

Vodka and petrol hikes

Another unpleasant surprise is about to hit consumers, too. Vodka and cigarettes taxes are rising from July 1 as well. Excise on strong alcohol has risen by 25 percent, and by 7.5 percent on tobacco. The cheapest bottle of vodka will now cost at least 125 rubles, instead of the previous 100 rubles, and the cheapest bottle of cognac will be 219 rubles. This will raise an estimated 150 billion rubles for the federal budget in 2012, and 250 billion rubles in 2013.

Apart from higher traffic fines, drivers will have to fork out more for petrol, where taxes will also rise by 6.5-6.7 percent per ton, making a liter of petrol to 40-50 kopeks more expensive. In some regions, public transport fares will also rise by 20-30 percent.

Experts said that such a rapid jump in prices will add to social tensions, and lead to more products being sold on the black market.

“I think any price rises will result in more social tensions and consumer dissatisfaction,” said Igor Zverev, a lawyer at the Society for Protection Consumers’ Rights. “With alcohol and cigarettes, it may also encourage bootleg producers of these products.”

Keywords: Russia, Economy, Business, Prices - Russian News - Russia

As Russians prepare for the annual summer slowdown, it’s not just the temperatures that are rising.

file photoJuly 1 sees a whole raft of price hikes – on everything from gas and electricity to vodka, petrol and water. The price rises, government critics claim, were timed to come into effect after the recent elections, and as Russians wind down for summer.

Household gas prices are set to rise by 15 percent, while prices for electricity, cold and hot water will rise by 10 percent and 6 percent, respectively. A second wave of price rises will happen in September, when cold water tariffs will become 4.5 percent more expensive, and heating and hot water will cost 5.6 percent more. The hikes are twice as high because prices stayed the same in January. “It’s obvious that no one would raise utility tariffs before the election,” said Irina Malikova, general director of Zhilkomaudit, a utility sector think tank. “That’s why the rise has been delayed and will come in two stages, so that it is not so rapid.”

Despite earlier promises from then-Prime Minister Vladimir Putin to keep tariffs steady, experts say the rise was inevitable. “Consumers should get ready for utility tariffs rising again, as the utility infrastructure is very worn out and needs investment, which so far can only be taken from consumers’ pockets,” Malikova said.

In another move to delay this year’s extra burden, heating bills will be payable only in winter in future, reducing summertime utility bills.

Motorists in Moscow and St. Petersburg will be hit by higher parking fines, some of which are being raised 10 times. From July 1, illegal parking will be penalized with a fine of 3,000 rubles ($100), with an extra fine of another 3,000 rubles if the car is towed away by the authorities.

Stopping within 5 meters of a pedestrian crossing will mean a fine of 1,000 rubles and stopping in a tunnel will result in a fine of 2,000 rubles.

Driving on bus lanes, which used to be penalized with fines of 300 to 500 rubles, will now be more expensive – 3,000 rubles for Moscow and St. Petersburg, and 1,500 rubles for other cities.

Getting tougher on motorists’ violations and encouraging the use of public transportation is key priority for Moscow Mayor Sergei Sobyanin’s administration. Along with the new fines for incorrect parking, City Hall has launched a transportation website, parking. mos.ru, indicating the location of parking lots and the number of parking places in them.

But motorists say there are not enough parking spaces in the city, and the new fines will simply cause more traffic jams and more corruption.

“It’s now more important not to keep hiking the fines but to make them work,” said Sergei Kanayev, leader of the Federation of Russian Motorists. “For the time being, the police haven’t been bothering to control the implementation of all those traffic rules. Moreover, there is no alternative – the city authorities confess that they can’t provide more than 15 percent of parking spaces needed. This makes 85 percent of drivers illegal. It all seems to be being done to clear the roads for officials, who have been deprived of their migalki.”

Vodka and petrol hikes

Another unpleasant surprise is about to hit consumers, too. Vodka and cigarettes taxes are rising from July 1 as well. Excise on strong alcohol has risen by 25 percent, and by 7.5 percent on tobacco. The cheapest bottle of vodka will now cost at least 125 rubles, instead of the previous 100 rubles, and the cheapest bottle of cognac will be 219 rubles. This will raise an estimated 150 billion rubles for the federal budget in 2012, and 250 billion rubles in 2013.

Apart from higher traffic fines, drivers will have to fork out more for petrol, where taxes will also rise by 6.5-6.7 percent per ton, making a liter of petrol to 40-50 kopeks more expensive. In some regions, public transport fares will also rise by 20-30 percent.

Experts said that such a rapid jump in prices will add to social tensions, and lead to more products being sold on the black market.

“I think any price rises will result in more social tensions and consumer dissatisfaction,” said Igor Zverev, a lawyer at the Society for Protection Consumers’ Rights. “With alcohol and cigarettes, it may also encourage bootleg producers of these products.”