Economists explain difference in gas prices in Dagestan and Chechnya

When commenting on a complaint of a driver from Chechnya, economists have noted that gas prices at gas stations in Chechnya are higher than in Dagestan because of the underdevelopment of infrastructure and the specifics of gas supplies to the republic.

A driver from Chechnya complained about the high prices for liquefied gas. He made a video at a gas station, in which he said that on April 12, the price of gas in Khasavyurt was 16.5 roubles and in Grozny – 21 roubles. Meanwhile, according to the Yandex.Maps service, the distance from Khasavyurt to the border with Chechnya is only 15 kilometres, reports the video posted on the “Caucasian Knot”.

Economist Alexander Pasechnik, the head of the analytical department of the National Energy Security Fund, explains the difference in the price of liquefied gas in Dagestan and Chechnya by the difference in the market. “The retail market acts in such a way that the price depends on competition and the development of infrastructure. I believe there is less competition in Chechnya, fewer gas stations, and the infrastructure as a whole is not as developed as in the neighbouring region,” Alexander Pasechnik told the “Caucasian Knot” correspondent.

“In any case, the Federal Antimonopoly Service (known as FAS) should be more attentive to the price difference, carefully study the reasons, and take appropriate measures,” Alexander Pasechnik noted.

Economist Igor Yushkov, an expert of the Financial University under the Government of the Russian Federation, agrees with the above opinion. “This question should be directed to the Federal Antimonopoly Service. It is this institution that should find out why there is such a big difference in the price of liquefied gas in the two neighbouring regions. Perhaps, the price is lower in Dagestan, since the region receives gas from Turkmenistan directly to Makhachkala, that is, through the Caspian Sea. That affects the fact that propane is cheaper in Dagestan than in Chechnya,” the economist told the “Caucasian Knot” correspondent.

This article was originally published on the Russian page of 24/7 Internet agency ‘Caucasian Knot’ on April 14, 2022 at 01:59 pm MSK. To access the full text of the article, click here.