President Victor Yushchenko’s decree to approve the Concept on the state regulation of natural monopolies and companies working on adjacent markets is aimed at making public utility prices more transparent, Oleksandr Shlapak, first deputy head of the presidential secretariat, said at a press briefing on Thursday, according to president's press office.

Shlapak said his boss had suggested establishing a commission to formulate such a concept at the beginning of 2007 and said this commission had concluded that Ukraine had no clear and transparent rules to set public utility prices and regulate natural monopolies and companies working on adjacent markets. He said the government’s inadequate regulation of natural monopolies was one of the main reasons of this year’s utility price hikes, describing the situation in this area as “chaotic.”

There are 11 natural monopoly markets and over 2,000 regional monopoly markets in Ukraine, he said. “All these markets are markets where services and goods are produced and later sold to consumers at prices which, we believe, must be seriously reviewed,” he said.

Shlapak said there were no independent price regulators in Ukraine. The National Commission on Energy Regulation should be independent but heeds the government’s recommendations, he said.

The Concept stipulates that Ukraine should have three such independent regulators: the National Commission on Energy Regulation, a commission to regulate the communications industry and transportation, and a commission to regulate public utility companies.

He said the document was based on Ukrainian experience and European rules and explained how to create an “absolutely new” system of state regulation. “We can make what natural monopolies do transparent and clear, so that each Ukrainian citizen – and this is our goal – could count how much hot water or energy should cost, using intelligible and simple formulas,” he said.

He addedthat Ukraine’s next parliament would have to pass or amend about twenty laws to change the country’s regulatory policy.


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