RUSSIA TO USE ITS CHEAP ENERGY RESOURCES TO STABILIZE ECONOMY

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MOSCOW, January 16 (RIA Novosti) - Russia will use its natural advantage of cheap energy resources until its economy has become stable and independent of external factors, Russian Prime Minister Mikhail Kasyanov said when answering questions of the State Duma deputies.

"When the economic structure has improved and its independence of the international situation has increased, then it will be time to allow the market to form prices on gas, electricity and railway transport. Until that time we can use our natural advantages to stabilize the economy," Kasyanov pointed out.

Not long ago the services of natural monopolies in Russia cost less than their prime costs, but "now the situation is improving," he said.

The present tariffs cover the costs on production and delivery of products and services of natural monopolies to consumers. The government admits that the fair price can be formed only by supply and demand. However, so far Russia can avoid this price formation mechanism to diversify the economy and recover processing industries.

As to the reform of natural monopolies, it follows one scenario: determination of competitive sectors and concentration of infrastructure with the state, the Prime Minister explained.

He recalled that the government had already launched the reform of the electricity and railway industries and assured that the gas industry reform would follow the same scheme.

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