Laar shows distaste for price hike

  • 2001-11-01
  • Sergei Stepanov
NARVA - On a visit to the Estonian city of Narva on Oct. 26, Prime Minister Mart Laar revealed a new, caring image by suggesting that Eesti Energia, the country's electricity-providing monopoly, should change its position regarding a price hike it plans for April 2002.

The price rise would mean that electricity will cost an average of 33 percent more for residential consumers, many of whom will not be able to afford it. A series of demonstrations against having to pay more for such a basic commodity have already taken place in the relatively deprived, largely Russian-speaking east of Estonia around Narva.

The government says it has carried out its own research about the social consequences of the implementation of the new prices, which would mean that the elderly and poor will have to pay on average an additional 11 kroons ($0.63) a month on top of a new subscriber's fee of 20 kroons.

After meetings held with the most vulnerable groups of the population, such as pensioners, the unemployed and large families with low incomes, the government has decided to speak up against the fee and the price increase.

"When Social Affairs Minister Eiki Nestor and I met Eesti Energia (officials) this week, we told them to change their tune in talks planned with the Energy Market Inspectorate in a month's time. This would, we said, ensure a positive partnership with the national government," Laar told The Baltic Times.

Any decision to cancel the changes looks unlikely. The independent inspectorate has already expressed its approval for the new pricing system.

"Maybe Eesti Energia will think about it," he added, emphasizing that if the company does not accept the recommendations it risks losing the government's support. "But their first response was that Eesti Energia is not a ministry.

"According to the law, the national government cannot influence Eesti Energia's pricing policy directly," lamented Laar.