Gas boss: competition will drive prices up 30%

Take note – story published 8 years ago

According to standard economic thinking, increased competition in any given marketplace is supposed to lower prices. However, according to gas import executive Juris Savickis, market liberalization in Latvia's gas market could increase prices by 20 to 30 percent.

Speaking on LTV's Rita Panorama morning news show Monday, Savickis - who sits on the board of the Latvijas Gaze utility and heads gas import company Itera among his business interests - said that even if the market is opened up - which Latvia is compelled to do under European Union instructions - Russia will remain the single supplier, simply selling via different middle-men.

As a result, gas prices to consumers will rise by 20% to 30%, Savickis predicted, pointing to a similar trend in the electricity market.

"At the moment prices are regulated," Savickis said, defending the current monopoly and suggesting that if in future people could not pay their gas bills they would leave the country.

Asked what salary newly-installed Latvijas Gaze CEO and former Prime Minister Aigars Kalvitis will be on, Savickis declined to specify, saying that the wage packed would be in excess of five thousand euros per month.

Savickis and Kalvitis have various business ties. As well as their gas connections - which saw Savickis among those deciding who to hire - they have a long association heading the Dinamo Riga ice hockey club. 

Former KGB officer Savickis also descrided the so-called "lustration" process in which the full details of collaboration with the former Soviet regime are put into the public sphere as "a bit silly" and a "populist and political move" that would achieve nothing - other than leading to more mass emigration, a specter he repeatedly raised.

Savickis also heaped praise on disgraced former Latvian Railways boss Ugis Magonis, currently in detention in connection with an anti-graft investigation, saying he had enjoyed years of cooperation with him.


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