ST.PETERSBURG GOVERNOR: STATE REGULATION OF GAS PRICES HOLDS BACK ECONOMIC GROWTH

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ST. PETERSBURG, March 28 (RIA Novosti-North West's Anna Novak) - St.Petersburg governor Valentina Matvienko thinks that the state regulation of prices on gas contains the growth of the economy.

"We've forgotten since the Soviet times what shortages are. Today they remain perhaps in only sphere, regulation of prices on gas. Now we live in conditions of the market economy. Willy-nilly we will have eventually to switch over to market prices", Matvienko told journalists in St.Petersburg, commenting on the meeting in Moscow with Gazprom chief Alexei Miller.

To Matvienko, it is "impossible to preserve this 'socialist oasis' in a separate sphere".

"With a 'good price' set by somebody somewhere there just cannot be enough gas for all. It will certainly hold back economic development, the emergence of new enterprises ready to pay the market price", Matvienko said.

At the same time, she noted that the state regulation of gas prices should be preserved for the population and institutions in the budget sector.

"We should clearly understand that gas prices regulated by the state must be preserved for the population, budget institutions, housing and utilities sector. These prices must take into account the level of population incomes", she said.

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