Tashkent, Uzbekistan (UzDaily.com) -- Deputy head of the Central Bank of Uzbekistan Bekhzod Khamraev expects electricity and gas prices to be liberalized in May. This measure was postponed for several years, Gazeta.uz reports.

An increase in prices for electricity and gas in Uzbekistan may occur in May. This was stated by Deputy Chairman of the Central Bank of Uzbekistan Bekhzod Khamraev in an interview with Gazeta.uz on January 26. “[Liberalization] is expected in May. This is included in the [inflation] forecast,” he said.

The Central Bank previously approved two scenarios for the development of the economy of Uzbekistan until 2025. According to the main scenario, fiscal consolidation will begin (optimization of revenues or expenditures to reduce public debt and budget deficit to ensure fiscal sustainability) due to structural changes and gradual adjustment of regulated prices to market prices, the competitive environment will improve due to a reduction in the role of the state in the economy and the continuation of planned reforms, volumes of private and direct foreign investments will grow rapidly.

Under an alternative scenario, regulated prices (for gas, electricity, heat supply) will be indexed based on inflation.

Bekhzod Khamraev expects price liberalization to take place within the framework of the main scenario.

The last time gas and electricity tariffs were raised in Uzbekistan was in August 2019. The liberalization of prices for energy resources and the reform of the energy sector have been repeatedly postponed.

The government planned to raise electricity and gas tariffs in February-March 2020, but postponed this measure due to the coronavirus pandemic. In October 2020, the chairman of Regional Electric Grids, Ulugbek Mustafoev, announced that President Shavkat Mirziyoyev had set the task of not raising electricity tariffs in 2021-2022.

In May, we wrote that in total in Uzbekistan there are 7.3 million subscribers consuming electricity, of which 80% consume an average of up to 200 kWh of electricity per month. However, these households account for only 31% (5.7 billion kWh) of the total electricity consumed by the population.

In Uzbekistan, 85% of the 4 million gas subscribers consume an average of up to 500 cubic meters of natural gas per month. However, they account for only 35% (4.5 billion cubic meters) of the total consumption of the population.

The government planned to introduce a social norm for energy consumption and introduce limits from July 15, 2022, since those who consume more receive most of the state subsidies, but later postponed a decision on this.

Economist Behzod Khoshimov noted that the current pricing policy in the energy sector of Uzbekistan leads to the poor getting poorer and the rich getting richer. Billions of dollars in subsidies are more rewarding for the wealthy, he says.