Reasonableness of administrative costs included in heat energy tariffs must be assessed - Reirs

RIGA - The justification of the administrative expenses included in heating energy tariffs must be assessed, Minister of Finance Janis Reirs (New Unity) said in an interview with Latvian Television on Thursday.

He expressed confidence that a review of the administrative costs for energy companies could reduce tariffs. "I am sure it would cut tariffs," Reirs said

Reirs said a meeting of the Budget and Tax Sub-Committee of the National Tripartite Cooperation Council will be convened next week to discuss the issue.

"I will call on entrepreneurs and also trade unions, which are our social partners, to find a mechanism to assess the administrative costs of these companies. (..) How much profit is in this? Maybe they can live without making a profit for two years. Why do we need profits for Rigas Siltums or Latvenergo, when we can use this to reduce tariffs,'' said the Minister of Finance.

Reirs also stated that announcements made by some regarding tariff increases by two, three or four times were unfounded. "I do not understand the meaning of such statements," the minister said.

For example, he mentioned that companies previously working in road construction talked about price increases two or three times, but according to a study conducted by Latvijas Valsts Celi, the price increase was 15 percent, which was admitted by practically all builders.

"The initial uproar is very disturbing. Of course, the price will be higher, but what the price will be depends on external conditions," Reirs said.

The Minister also noted that the government, for example, has considered a report on the possibility of eliminating the bio-fixing of fuel in order to reduce the price of fuel by about 10-12 percent, but fuel traders do not support such an idea.