Natural monopoly and its regulation. Regulation of the activities of natural monopolies Rules of conduct for monopoly firms

MINISTRY OF AGRICULTURE OF THE RF

FEDERAL STATE EDUCATIONAL INSTITUTION OF HIGHER PROFESSIONAL EDUCATION

PERM STATE AGRICULTURE

ACADEMY IM. ACADEMIC D.N. PRYANISHNIKOVA

Department of Economic Theory

COURSE WORK

Discipline: economic theory

On the topic: Natural monopolies: the need and forms of their regulation

Completed by: student of the Faculty of Economics,

finance and commerce full-time

training in the direction of "Commerce"

Islamatdinov Ranis Gapbarovich

Code: Kb-3697-2011

Head: senior lecturer V.V. Loginova

Introduction

Theoretical approaches to the formation of the concept of “natural monopoly”

1 History of the emergence of natural monopolies

2 The concept of natural monopoly

3 Legal support for natural monopolies

Antimonopoly regulation in Russia

2 Methods of antimonopoly policy in Russia

3 Prospects for the development of Russia’s accession to the WTO

Conclusion

Introduction

The problems of monopolization of economic life and competition in commodity markets today attract the close attention of not only specialists, but also the general public.

Since the beginning of the 90s, these problems have become acute for Russia: without taking firm and consistent measures against monopolism, one cannot hope for the success of economic reform and the transition to a market economy. The success of economic transformations to a large extent depends on a balanced, verified system of state regulation of monopoly processes and competitive relations. In our country, whose industry inherited a whole complex of monopolistic giants from the command-administrative system of the former USSR, the problem of demonopolizing the economy and preventing the strengthening of the role of monopolies already operating in the market is becoming especially important.

Monopoly is an extreme case of imperfect competition, where there is a single seller and no opportunity for others to enter.

If it costs less to produce any volume of output by one firm than to produce it by two or more firms, then the industry is said to be a natural monopoly.

Monopolies, having an exceptional position, eliminate competitors everywhere, thereby destroying the normal market, reduce the quality of products, ignoring the achievements of scientific and technological progress, and cause a decrease in the overall efficiency of production.

The attitude of the public and the state towards various forms of monopolies is always ambivalent due to the contradictory role of monopolies in the economy. Monopolies limit output and charge higher prices due to their monopoly position in the market, which causes misallocation of resources and causes increased income inequality. Monopoly reduces the standard of living of the population. Monopolistic firms do not always use their full capabilities to ensure scientific and technical progress. Monopolies do not have sufficient incentives to increase efficiency through scientific and technical progress, since there is no competition.

The most important economic functions of a modern state include the development and implementation of antimonopoly policy.

Trying to compensate for the imperfections of the market, the state, resorting to various methods and methods, selects the most adequate for a particular task. The most important of these tasks is to eliminate the consequences generated by market imperfections.

To counter the monopolization of markets and protect competition, the state:

– develops laws on the basis of which it is possible to identify and punish firms caught in monopolization;

– helps create new firms that can counteract or destroy the monopolization of markets (this is what the Small Business Support Committee does in our country).

– Government regulation plays an important role in maintaining the required level of competition in the economy.

The essence of antitrust policy is a system of laws that restrict the actions of companies, leading to a decrease in competition and the elimination of monopoly. The effectiveness of such a policy depends on three critical elements:

– the nature of the laws themselves;

– interpretation of laws by courts;

– the consistency with which court decisions are implemented.

All three elements change over time and, accordingly, the essence of antimonopoly policy changes.

The topic of regulating natural monopolies is especially relevant in Russia, since the legislative framework in it is still very poorly developed, and in order to create the normal functioning of the product market, it is necessary to take into account the factor of natural monopolies.

In Russia, the process of creating state control to prevent unfair competition actually began from scratch, since the command-administrative system that was present in economic management until recently inherently excluded the presence of free competition in economic activity.

The purpose of this course work is to study monopolization and antimonopoly regulation in Russia.

To achieve the goal, the following tasks must be completed:

Explain the basic concepts of natural monopoly and the reasons for its occurrence.

Determine the role of government regulation in Russia and the features of antimonopoly legislation.

1. Theoretical approaches to the formation of the concept of “natural monopoly”

1 History of the emergence of natural monopolies

At the end of the 19th century, the market faced difficult problems almost for the first time in its centuries-long history of development. A real threat has arisen to the functioning of competition - this necessary attribute of the market. Significant obstacles to competition have arisen in the form of monopolistic entities in the economy.

The history of monopoly goes back to ancient times. Monopolistic tendencies in different forms and to varying degrees appear at all stages of development of market processes and accompany them. But their modern history begins in the last third of the 19th century, especially during the economic crisis of 1873. The interconnectedness of phenomena - crises and monopolies - indicates one of the reasons for monopolization, namely: the attempt of many firms to find salvation from crisis shocks in monopolistic practice. It is no coincidence that monopolies in the economic literature of that time were called “children of the crisis.”

The main feature of a monopoly formation (monopoly) is the occupation of a monopoly position. The latter is defined as the dominant position of an entrepreneur, which gives him the opportunity, independently or together with other entrepreneurs, to limit competition in the market for a certain product.

A monopoly position is desirable for every entrepreneur or enterprise. It allows them to avoid a number of problems and risks associated with competition, take a privileged position in the market, concentrating certain economic power in their hands, they have the opportunity, from a position of power, to influence other market participants and impose their conditions on them. We can assume that they impose their personal interests on their counterparties, and sometimes on society.

In Russia, the history of the emergence and development of monopolies has its own characteristics.

The first monopolies were formed in the 80s of the 19th century (Union of Rail Manufacturers, etc.). The uniqueness of the development lay in the direct intervention of government bodies in the creation and operation of monopolies in industries that met the needs of the state economy or were of particular importance in its system (metallurgy, transport, mechanical engineering, oil and sugar industries). This led to the early emergence of state-monopoly tendencies. In the 80-90s, there were at least 50 different unions and agreements in industry and water transport. Monopolistic concentration also occurred in banking. Foreign capital had an accelerating effect on the monopolization process. Until the beginning of the 20th century, the role of monopolies in the economy was not great. The economic crisis of 1900-03 had a decisive influence on their development. Monopolies gradually covered the most important industries and most often formed in the form of cartels and syndicates in which sales were monopolized while their participants retained production and financial independence. The absence of legislative and administrative norms regulating the procedure for registering and operating monopolies made it possible for the state to use legislation against them that formally prohibited the activities of monopolies. This led to the proliferation of officially unregistered monopolies, some of which, however, operated with the consent and direct support of the government (military-industrial monopolies). The illegal situation created inconvenience (limitation of commercial and legal activities) and therefore they sought legal legalization, using permitted forms of industrial associations. Many large syndicates - Produgol, Prodvagon, Krovlya, Med, Provoloka, ROST, etc. - were in form joint-stock enterprises, the actual goals and activities of which were determined by special unspoken counterparty agreements. Often the same enterprises participated in several agreements simultaneously. During the period of industrial boom (1910-14), there was a further growth of monopolies. The number of commercial and industrial cartels and syndicates was 150-200. Many of the largest banks turned into banking monopolies, whose penetration into industry, along with the processes of concentration and combination of production, contributed to the strengthening and development of trusts, concerns, etc. (Russian Oil General Corporation, Triangle, Kolomna-Sormovo, Rossud-Noval, military-industrial group of the Russian-Asian Bank, etc. ). The level of concentration of sales and production of monopolies was very uneven. In some sectors of the national economy (metallurgy, transport, mechanical engineering, oil and coal mining, sugar production) monopolies concentrated the bulk of production and sales and almost completely dominated the market; in others (metalworking, light and food industries) the level of monopolization was low.

During the First World War 1914-18. the activities of a number of local monopolies ceased, but in general the war increased the number of monopolies and their power. The largest concerns of Vtorov, Putilov-Stakheev, and Batolin arose. Monopolies associated with military production especially developed. Russian monopoly capitalism existed on the basis of the merging of monopolies with government bodies (the metallurgical plant, the Jute Syndicate, etc.), as well as in the form of “forced associations” on the initiative and with the participation of the government (the Vankov, Ipatiev organizations, the Kiev organization for the production of barbed wire, etc. ). Monopolies were eliminated as a result of the October Revolution during the nationalization of industry and banks. The Soviet state partially used the accounting and distribution bodies of monopolies when creating bodies for managing the national economy. During Russia's transition to a market, monopolies and problems associated with them arose again.

1.2 The concept of natural monopoly

There are different types of monopoly, which depend on the market structure and the form of competition. I would like to draw attention to natural monopoly.

“Natural monopoly is a state of a commodity market in which satisfying demand in this market is more effective in the absence of competition due to the technological features of production, and goods produced by subjects of a natural monopoly cannot be replaced in consumption by other goods, and therefore demand in this commodity the market for goods produced by subjects of natural monopolies depends to a lesser extent on changes in the price of this product than the demand for other types of goods."

A natural monopoly exists when its economies of scale are so great that one business entity can supply the entire market at lower costs than the costs of a number of competing businesses. Large enterprises have better technical equipment and more power, resulting in increased productivity and lower costs per unit of production, which means more efficient use of resources. In this regard, natural monopoly becomes a desirable phenomenon for society, although the monopoly nature still forces them to regulate their activities.

Another feature of natural monopolies is the existence of very high barriers to entry into the industry. The presence of a single manufacturer whose economies of scale are too large determines the amount of capital required to enter the industry. Society most often simply cannot support a second such manufacturer (fixed costs are significant). For these types of activities, the size of an effective enterprise is, as a rule, equal to or as close as possible to 100% of the volume of domestic consumption of these goods, which corresponds to just one efficient producer in the industry.

An example of a natural monopoly would be water supply, telephone communications, and postal services within a particular region. It should be especially noted that in such industries, economies of scale are especially pronounced, and at the same time, competition is not feasible. Let's try to explain why competition is unacceptable in natural monopolies. It is obvious that it is costly for society to have several firms supplying household and industrial facilities within one region with electricity or water, since operations on the above-mentioned types of products require significant fixed costs for generators, pumping and treatment equipment, water pipelines and high-voltage transmission lines . These types of costs are simply beyond the capabilities of an individual company operating in the industry; even if such a company can afford to incur costs of this magnitude, they will still not be covered by production income, since the presence of several suppliers of water or electricity divides the entire industry into spheres of influence of individual firms and thereby limits the share participation of each company. In such conditions, an individual company does not fully use its permanent equipment, as a result of which costs per unit of production, and therefore tariffs for electricity and water, become unreasonably high. For clarity, let us imagine a situation where there are several firms operating in an industry, and all of them are in the same position. At the same time, there is fierce competition between individual firms both in the acquisition of means of production and in sales. As a result of competition between individual firms, weak firms go bankrupt, while stronger ones (in order to withstand further competition) merge, forming a pure monopoly. As a pure monopoly develops, it can quickly compensate for past losses and take advantage of its new monopoly position in the market by charging exorbitantly high prices for its goods and services. In principle, a pure monopoly can exist and develop successfully without causing any harm to the industry. An example of such monopolies can be monopolies in the automotive industry or in the production of household goods. However, in an industry that is extremely necessary for the population of the region, a pure monopoly is not only ineffective, but also flawed. Therefore, in order to prevent the formation of a pure monopoly in industries such as water supply or electricity, the government usually grants the exclusive privilege of one firm to supply, for example, water or natural gas.

A firm that can supply all the market demand for a good at a lower average cost than would be possible if two or more firms supplied exactly the same quantity of the good is called a natural monopoly. The cost savings that come from large scale production (with increasing economies of scale) are the reason why these firms are often given monopoly rights. Changes in technology can change cost conditions. For example, long-distance telephone service was once considered a natural monopoly, but it is no longer viewed as such due to changes in technology. Satellite communications systems and other technological innovations allow a number of firms to compete in the long-distance industry, and the larger seller no longer enjoys the advantage of lower average production costs.

For example, the marginal revenue obtained by increasing output from one unit to two is $10. This is marked by point G on the MR curve. The MR curve originates at the same point on the vertical axis as the demand curve. The marginal revenue of the first unit of output is always equal to the price of that unit, since in this situation there is no “initial output” that generates less revenue as a result of the price reduction required to increase demand. However, after the first unit is sold, the MR becomes lower than the price.

To maximize its profits, the monopolist follows the same kind of two-step procedure as a perfectly competitive firm. In the first step, both types of firms calculate the amount of optimal positive output that maximizes profit, provided that the firm produces anything at all. While a perfect competitor uses the market price in these calculations, the monopolist uses marginal revenue. In the second step, both types of firms decide whether to produce this positive output or stop production and produce nothing.

Figure 2 shows the demand curve D and the marginal revenue curve MR - the same as in Figure 1. The firm's marginal cost curve (MC) is also shown. For a monopolist, as for any firm, MC shows the increase in the firm's total costs when it increases output by one unit.

When a monopolist increases output by one unit, the increase in revenue equals marginal revenue. The increase in costs is equal to the value of marginal costs. If marginal revenue exceeds marginal cost, then total revenue increases by more than marginal cost, and therefore profit increases. But if the last unit of output increases costs by a greater amount than the increase in income, then output should be reduced. Thus, if a firm produces anything at all, it will maximize its profit by producing the level of output at which marginal revenue equals marginal cost.

At the optimal positive volume for a monopoly, which allows maximizing profit, provided that the firm does not stop production, marginal revenue must equal marginal cost (MR=MC).

If a monopolist decides to produce something, he will set the price so that the quantity demanded equals his optimal positive output. Since marginal cost is equal to marginal revenue at optimal positive output, and marginal revenue is lower than price, it follows that this price will be higher than marginal cost. Thus, if a monopolist decides to produce something, it will maximize profit by raising the price above marginal cost.

As under perfect competition, the only difference in calculating the value of optimal positive output for the short and long periods is that the latter includes long-term marginal costs. In the short run, a monopolist, like a perfect competitor, continues to produce as long as it recovers its variable costs. Whereas in the long term, all total costs - both permanent and temporary - must be reimbursed. Table 1 briefly describes the rules of behavior of a monopolist that allow him to maximize profits.

Table 1 - The monopolist's decision on the optimal volume of supply.

There are two differences between this table and the case of perfect competition. The first is that in the limit condition, which is used to calculate the amount of optimal positive output. Price is replaced by marginal revenue. The second difference is that under the profit test, the monopolist uses the price at which the quantity demanded equals the optimal positive output, while a perfect competitor uses the existing market price, which he cannot influence.

Perfect competitors can be characterized as price takers because they understand the market price as given and not beyond their control. Monopolists can be characterized as price takers because they take the market curve D as given and choose both price and output. Since there is no relationship between the price of the monopolist and the level of output, there is no supply curve for the monopolist.

Thus, it cannot be said that the monopoly price and monopoly output are determined by the relationship between supply and demand. But under conditions of monopoly, as well as under conditions of perfect competition, price and output are determined by the conditions of demand and the conditions for the formation of costs. Marginal cost is the key cost element in both cases.

In Fig. 2. shows the actual short-term average total cost curve “N” of the ATS, usually having a U-shape. At an optimal, positive output volume Q*, the average total costs “N” amount to the value of ATC*. The firm's profit per unit of production will be equal to the price P* minus costs, or the average unit cost of ATC*. Therefore, in this case, “N” will cover its costs and choose the production volume Q*. Indeed, the total amount of its profit is equal to the shaded area: the amount of profit per unit of output (P* - ATC*), multiplied by the total volume of output (Q*).

Thus, the features of a natural monopoly are:

Goods produced by subjects of a natural monopoly cannot be replaced in consumption by other goods.

The subject of a natural monopoly is an economic entity (legal entity) engaged in the production (sale) of goods under the conditions of a natural monopoly.

Existence of very high barriers to entry into the industry.

1.3 Legal support for natural monopolies

The purpose of state legal regulation of natural monopolies is to maintain or establish a balance between the interests of consumers and the interests of subjects of natural monopolies, to streamline their activities by introducing rules of behavior. Laws regulating the activities of natural monopolies can be conditionally classified into the following groups:

Laws, the subject of regulation of which are directly natural monopolies and the conditions of their activity on the market: Federal Law of August 17, 2006 No. 147-FZ “On Natural Monopolies”

Industry laws. Federal Law of March 31, 2004 No. 69-FZ “On Gas Supply in the Russian Federation”, Federal Law of January 10, 2003 No. 17-FZ “On Railway Transport in the Russian Federation”, Federal Law “On Electric Power Industry” ( ed. dated November 23, 2009) N 261-FZ, Federal Law dated April 14, 1995 No. 41-FZ “On state regulation of tariffs for electrical and thermal energy in the Russian Federation”, Federal Law dated October 26, 2002 N 127-FZ (as amended on December 31, 2007) “On insolvency (bankruptcy).”

Laws governing various aspects of the economic field. These laws include the Civil Code (for example, paragraph 6 regulates relations arising in the process of circulation of electrical energy), the Code of the Russian Federation on Administrative Offenses (Article 19.8 determines sanctions for failure to provide information established by law to the antimonopoly body, to the body regulating natural monopolies ).

The Federal Law “On Natural Monopolies” defines the legal basis of federal policy in the field of natural monopolies and is aimed at balancing the interests of consumers and subjects of natural monopolies, ensuring the effective functioning of subjects of natural monopolies and the availability of goods sold to consumers.

Bodies regulating natural monopolies have the right to:

make mandatory decisions for natural monopoly entities on the introduction, change or termination of regulation, on the application of regulatory methods provided for by this Federal Law, including on the establishment of prices (tariffs);

make, in accordance with its competence, decisions on facts of violation of this Federal Law;

send to subjects of natural monopolies mandatory instructions to stop violations of this Federal Law, including on eliminating their consequences, on concluding contracts with consumers subject to mandatory servicing, on making changes to concluded contracts, on transferring to the federal budget the profits they received in as a result of actions that violate this Federal Law;

make decisions on inclusion in the register of natural monopoly entities or exclusion from it;

send to executive authorities and local self-government bodies mandatory instructions to cancel or amend acts adopted by them that do not comply with this Federal Law, and (or) to stop violations of this Federal Law;

make decisions on imposing a fine on a natural monopoly entity;

bring to administrative responsibility in the form of a warning or a fine the heads of natural monopolies, officials of executive authorities and local governments in cases provided for by this Federal Law;

file a claim in court, as well as participate in the consideration of cases in court related to the application or violation of this Federal Law;

exercise other powers established by federal laws. Federal Law of August 17, 2006 N 147-FZ “On Natural Monopolies”

Grounds for decision-making by regulatory bodies of natural monopolies on the application of regulatory methods:

The body regulating a natural monopoly makes a decision on the application of regulatory methods provided for by this Federal Law and other federal laws in relation to a specific subject of a natural monopoly based on an analysis of its activities, taking into account their stimulating role in improving the quality of goods produced (sold) and in meeting the demand for them . In this case, the reasonableness of the costs is assessed and the following are taken into account:

– costs of production (sales) of goods, including wages, cost of raw materials and materials, overhead costs;

– taxes and other payments;

– the cost of fixed production assets, the need for investments necessary for their reproduction, and depreciation charges;

– projected profit from the possible sale of goods at different prices (tariffs);

– remoteness of various consumer groups from the place of production of goods;

– compliance of the quality of manufactured (sold) goods with consumer demand;

– state subsidies and other measures of state support Federal Law of August 17, 2006 No. 147 “On Natural Monopolies”

When making a decision on the application of methods for regulating the activities of a particular natural monopoly entity, the natural monopoly regulatory body is obliged to consider the information provided by interested parties about the activities of this natural monopoly entity.

Bodies regulating natural monopolies independently make decisions on inclusion/exclusion of natural monopoly entities from their register. If an economic entity is defined as a monopolist and is included in the register, then state legal regulation will be applied to it; which method should be specifically chosen in relation to a particular monopolist is determined by the body regulating natural monopolies.

Federal Law No. 147 of August 17, 2006 “On Natural Monopolies” established that the bodies regulating natural monopolies may use the following methods of regulating the activities of natural monopolies:

) price regulation, carried out by determining (establishing) prices (tariffs) or their maximum level;

) identification of consumers subject to mandatory servicing and (or) establishment of a minimum level of their provision in the event of impossibility of satisfaction in in full needs for goods produced (sold) by a natural monopoly subject, taking into account the need to protect the rights and legitimate interests of citizens, ensure state security, protect nature and cultural values.

2. Antimonopoly regulation in Russia

.1 Natural monopolies in Russia

Russia has not escaped the negative impact of industries that are natural monopolies in market conditions. In Russian industry there are currently four thousand monopolistic enterprises and their products account for 7% of the total. Of these, 500 are natural monopolies.

Natural monopolies in Russia exist in various industries: electric power, gas industry, oil industry.

“Electric power is an integral part of the energy sector, ensuring the electrification of the country’s economy on the basis of rational production and distribution of electricity. It has a very important advantage over other types of energy - the relative ease of transmission over long distances, distribution between consumers, conversion into other types of energy (mechanical, chemical, thermal, light).” Its main feature is that the products produced do not have the ability to accumulate for another use. It follows from this that electricity consumption coincides with its production, both in time and in quantity (taking into account losses).

Features of the electric power industry:

– The importance of energy supply for the population.

– High capital intensity of electric power industry development.

– High level of danger for the population and the environment.

Electric power industry is the main sector of any economy. It ensures the functioning of industry, agriculture, transport, and public utilities. The level of socio-economic development of the country directly depends on it. In the Russian electric power industry, a natural monopoly has developed historically. There is simply no room for competition in this industry, since this would mean building expensive networks that perform the same functions and tasks, but belong to different entities. In this case, huge costs for the construction of these networks are inevitable.

Electric power industry is one of the fastest growing sectors of the economy in Russia. At this time, the main consumer of electricity is industry, or more precisely, mechanical engineering, metallurgy, chemical and forestry industries.

Rapid growth rates and a high level of centralization are one of the main features of the electric power industry.

Partial privatization of enterprises and the transition to joint stock companies in the Russian electric power industry began in 1992. But before this happened, a preliminary restructuring of the industry was carried out. The problem of maintaining the functioning of the industry has arisen. A quick solution to this problem was to create a holding company that controls the entire electric power industry - the Russian Joint Stock Company (RAO) of Energy and Electrification "UES of Russia".

The UES is a single entity for managing power plants. The UES is managed from one center, which is equipped with the necessary electronic computer equipment.

OAO RAO UES of Russia - a Russian electric power company that existed before July 1, 2008 - is a striking example of a natural monopoly. The full name is “Open Joint-Stock Company for Energy and Electrification “Unified Energy System of Russia””. This is a complex complex of power plants, which is united by a common operating mode with one dispatch control center (DC).

The structure of the UES carries out management at three levels: interregional, interregional and regional. This allows you to quickly eliminate the accident without much damage to the UES and local consumers. The central point is located in Moscow. It controls the operation of all stations that are connected to it.

The main goal of the formation of RAO UES of Russia is the formation of a wholesale electricity market. After the merger, the company acquired about 50 new power plants. The company is a monopolist in the electric power industry. It controls 77.7% of the country's total power plant capacity. RAO UES of Russia owns all power transmission networks in the country.

In 1991, differentiated tariffs were introduced for the payment of electricity by consumers in individual regions, depending on the costs of each energy system. This has led to the fact that more efficient stations remain underutilized, and, conversely, less efficient ones belonging to regional energy systems suffer from overloads.

The goal of the reform of the Russian electric power industry: “the entry of private owners into competitive sectors of the electric power industry and the exercise of state control over the natural monopoly infrastructure.” Preparations for the reform began in 2000.

The reorganization of OAO RAO UES of Russia was carried out in two stages. The first stage ended on September 3, 2007. The second stage ended on July 1, 2008. It was then that RAO UES of Russia ceased to exist as a legal entity.

The Russian energy system is considered one of the most reliable in the world.

The gas industry is one of the parts of the fuel and energy complex, the fuel industry. Unlike oil, gas does not need to be pre-processed for use, but must be sent directly to the consumer.

Based on socio-economic aspects, the main areas of natural gas use are:

– Utility and household needs (heating, hot water, cooking);

– State needs (defense, reserves);

– Providing other needs (production of mineral fertilizers, raw materials for gas chemistry).

Gas is used in such industries as electric power, chemistry, metallurgy, construction, and printing. But the most significant consumer of gas in Russia is the electricity sector. Over the past few years, this sector has seen a shift in most of its heat and power production to gas. The total consumption is 40.5%.

The gas industry is a branch of natural monopoly, which is characterized, first of all, by the concentration of unique reserves in a small number of nearby fields. Under such conditions, it is difficult for a competitive market to emerge.

The gas industry is an industry that in our country has practically not changed its production volumes over the past few years. With increasing demand, the potential remains to increase production volumes not only within the country, but also abroad.

A constant supply of gas makes it possible to provide heat and electricity to the population in almost all regions of the country.

The following goals of the gas industry are distinguished:

– Stable and efficient satisfaction of gas demand;

– Development of the Unified Gas Supply System (UGSS);

– Improving the gas industry to improve economic performance;

– Ensuring constant revenues to the state budget;

– Stimulating demand for products from related industries;

– Ensuring external political relations.

The restructuring of the gas industry in Russia has not led to major changes, unlike the electric power industry.

In 1989, the USSR Ministry of Gas Industry was transformed into the State Gas Concern Gazprom. On November 5, 1992, the decree of the President of the Russian Federation “On the transformation of the GGC Gazprom into the Russian joint-stock company Gazprom” was signed. RAO Gazprom supported and contributed to the development of many domestic industrial enterprises. He guaranteed orders for the supply of material and technical resources, and also invested huge amounts of money in the creation of new equipment and technology. Gazprom cooperates with enterprises, taking into account, first of all, the social and economic interests of society in a particular region as a whole. RAO Gazprom has entered into cooperation agreements with 31 regions and constituent entities of the Russian Federation. Issues related to the elimination of consumer debts for gas supplied, ensuring payments, as well as social and economic problems are being resolved - the introduction of new technologies, the preservation of jobs. The role of RAO Gazprom in Russia is great. It provides about 8% of Russia's GDP and provides a quarter of all tax revenues to the budget.

In 1999, RAO Gazprom was transformed into OAO Gazprom. It accounts for about 25% of federal budget revenues. Gazprom is one of the largest creditors in Russia. It owns about 30% of the European gas market. It includes 8 gas production associations and 13 regional gas transportation enterprises.

Gazprom occupies one of the most stable positions in the world market. This is due to the unique resource base and developed gas pipeline system.

Gazprom is an example of a natural monopoly in Russia; it is the largest exporter. Creating a competitive gas market in Russia is currently practically impossible. This can only happen if all the deposits in the north of Western Siberia are exhausted. Then less profitable deposits will become more in demand.

Russia has 35-40% of the world's natural gas reserves, which amounts to more than 48 trillion. cube m of proven gas reserves in the world.

Forecasts for further gas production volumes in Russia directly depend on the socio-economic development of the country. There are three development paths:

Favorable development option: gas production in Russia could reach 645-665 billion cubic meters. m in 2010 and 710-730 billion cubic meters. m in 2020.

Moderate development option: 635 billion cubic meters. m in 2010 and 680 billion cubic meters. m in 2020.

Critical development option: only 555-560 billion cubic meters. m in 2010 and 610 billion cubic meters. m in 2020.

In addition to such industries as the electric power and gas industries, natural monopolies also exist in the oil industry.

“Oil is a flammable, oily liquid distributed in the sedimentary shell of the Earth, the most important mineral.”

The oil industry is an integral part of the fuel and energy complex, which includes the extraction and production of fuel, the production of thermal and electrical energy, the distribution and transportation of energy and fuel. It is closely connected with all sectors of the economy, and therefore plays a big role for the Russian economy. Oil is the most valuable and important raw material for the chemical industry, as it is necessary for the production of synthetic rubber, synthetic fibers, plastics, polyethylene, protein substances, and detergents. Petroleum industry products are used in mechanical engineering: adhesives, parts for plastics, oils. Residues from oil waste processing are used in metallurgy for the smelting of aluminum and steel. Petroleum products are also used in the pharmaceutical, perfume and medicine industries.

“The oil industry is a branch of heavy industry, including exploration of oil and oil and gas fields, drilling wells, production of oil and associated gas, and pipeline transportation of oil. The purpose of oil exploration is the identification, geological and economic assessment and preparation for production of industrial deposits; it is carried out using geological, geophysical, geochemical and drilling work.”

All deposits are divided into the following groups:

Explored in detail;

Pre-explored;

Poorly explored;

The boundaries are not defined.

Currently, exploration of deposits has been partially suspended, as there are not enough funds to carry out intensive work. But there are other problems of the oil industry, such as: irrational use of existing fields, large losses of oil during production and transportation, aging technologies, etc.

At present, the oil industry in Russia can be characterized by a reduction in the growth of industrial reserves, a decrease in quality and pace, a reduction in drilling volumes, an increase in the number of inactive wells, the absence of large fields, a progressive lag in the industry, insufficient issues social development and ecology.

The main consumer of oil is oil refineries, since oil is not used in its pure form. Such plants are located in all regions, since it is much more profitable to transport oil in its pure form than its processed products.

The main feature of the domestic oil market is relatively low prices. This leads, first of all, to the low cost of business of the country's oil companies compared to foreign analogues. Until 1992, crude oil prices were set by the government for all companies. But in 1992, they decided to replace direct control over the industry with indirect regulation. This was matched by a sharp rise in energy prices. To protect the population from the surge, the government introduced several mechanisms that limited exports and the overall profitability of oil companies. The domestic market is also affected by the “state oil supply system”: companies must sell certain volumes of oil to the state at fixed prices.

In Soviet times, the oil industry was led by three departments:

Ministry of Petroleum Industry (MPE);

Ministry of Construction for the Oil and Gas Industry (MNGS);

Ministry of Geology.

In November 1991, the state oil concern LangepasUrayKogalymneft (LUKoil) was created by Resolution of the Council of Ministers of the USSR No. 18. The new concern united three enterprises: Langepasneftegaz, Urayneftegaz, Kogalymneftegaz and the processing enterprises Permnefteorgsintez, Volgograd and Novoufimsky oil refineries.

In 1993, the state concern became the open joint-stock company Oil Company LUKoil. In 2004, LUKoil finally became a private company; the remaining shares of the state were sold to an American company.

LUKoil owns oil refineries with a total capacity of 58 million tons of oil per year. In addition, the company includes Korobkovsky, Usinsky, Perm and Lokosovsky gas processing plants.

Oil transportation is carried out with the help of Transneft, rail and water transport.

Forecasts for further oil production volumes include a stable increase in oil refining at Russian refineries and consumption of petroleum products in the domestic market in 2010-2030 (see “Forecast balance of supply and demand...”).

Figure 3. Forecast balance of oil supply and demand until 2030, million tons.

In 2030, the volume of crude oil refining should reach almost 300 million tons. Consumption of diesel fuel in the domestic market will grow at a faster pace. Net oil exports from Russia, according to the basic version of the Concept, in 2010-2020 will grow at a low rate (on average less than 0.6% per year) and should reach a maximum

level in 2020. In the commodity structure of exports, a significant increase in the role of diesel fuel is expected against the background of a decrease in the share of fuel oil.

At the same time, in order to achieve the strategic goals of the development of the oil complex, according to the Concept, it is necessary to solve a number of basic tasks:

– Ensuring expanded reproduction of oil reserves through geological exploration and timely preparation of fields for exploitation in both mature and new oil production areas;

– Improvement of oil production technologies, including the introduction of modern methods of enhanced oil recovery to increase the oil recovery factor;

– Development of transport infrastructure to increase efficiency, diversify the structure and directions of supplies of liquid hydrocarbons;

– Development of oil refining, aimed at increasing the depth of oil refining and improving the quality of produced oil products;

– Resource saving, reduction of losses at all stages of the technological process during the preparation of reserves, production, transportation and refining of oil.

In accordance with the needs of the domestic and foreign markets, a set of indicators for the strategic development of the oil complex was built, defining the parameters for the development of the mineral resource base, oil production, oil refining, oil pipeline and oil product pipeline transport. By 2030, the following parameters are expected to be achieved:

– increase in oil recovery factor (ORF) to 35-37%;

– growth of the share of Eastern Siberia and the Far East in all-Russian oil production to 18-19%;

– increase in the capacity of main pipelines for oil supplies to countries

– 6non-CIS countries by 65-70%;

– increase in the depth of oil refining to 89-90%;

– increase in the yield of light petroleum products to 72-73%.

– Terminal in the port of Vysotsk (Gulf of Finland, Baltic Sea) with a capacity of about 11 million tons of oil and oil products per year.

– Terminal near the village of Varandey (Barents Sea) with a capacity of 1.5 million tons of oil per year.

– Terminal in the port of Svetly on the Baltic Sea with a capacity of 6 million tons of oil and petroleum products.

– Astrakhan terminal in the village of Ilyinka (Astrakhan region) with a capacity of 2 million tons of oil and oil products per year.”

In the future, it is planned to reduce the consumption of oil as an energy raw material and increase the consumption of nuclear, solar and other types of energy, especially in the chemical industry and many sectors of the economy.

However, in terms of oil reserves, LUKoil is still inferior to another major oil company - Rosneft. In 1991, the state oil company Rosneftegaz was created on the basis of the disbanded Ministry of Oil and Gas Industry of the USSR. In 1993, it was transformed into the state enterprise Rosneft. In 1995, Rosneft was incorporated.

By 2008, the idea arose to unite large oil companies to create a single oil concern that would become the leader of the global oil industry. The formation of a state oil company on the basis of Rosneftegaz was conceived back in 2001. The state wanted to merge Rosneft and Gazprom. Rosneft, Surgutneftegaz, Zarubezhneft and RussNeft were to merge on the basis of Rosneft.” As a result of the merger, a leader in the global oil industry could be formed.

With the general decline in production in Russia, the demand for products and services of natural monopoly industries, with the exception of communications industries, has been constantly declining. These industries are extremely capital intensive, with a significant portion of their costs being fixed. As a result, the share of fixed costs in the unit price of production increased. In addition, until recently, natural monopoly entities financed investments largely from internal sources (investment and stabilization funds formed from costs and profits), which determined the excessive burden on tariffs.

The rapid and significant increase in prices in the electric power industry, gas industry, communications and railway transport has necessitated raising the question of the validity of costs (wages, social benefits, investment activities) and the correspondence of the quality of products and services offered to the price level.

But despite the obvious criticality of the situation, the problem of the need for state regulation of natural monopolies was recognized by the authorities only in 1994, when the rise in prices for the products they produced had already had a significant impact on undermining the economy. At the same time, the reformist wing of the government began to pay more attention to the problems of regulating natural monopolies, not so much in connection with the need to stop the rise in prices in relevant industries or to ensure the use of the possibilities of the price mechanism for macroeconomic policy, but first of all, trying to limit the range of regulated prices.

All these negative aspects of monopolism in the economy force modern states to develop and implement antimonopoly policy - a set of government measures aimed at preventing, limiting and suppressing monopolistic activities, providing all economic entities with equal conditions of competition and preventing unfair competition.

2.2 Methods of antimonopoly policy in Russia

State antimonopoly regulation of the economy includes two interrelated areas:

Development and adoption of special antimonopoly legislation;

Formation of a system of bodies carrying out antimonopoly regulation and monitoring compliance with antimonopoly legislation.

In a situation of strong monopolization of the economy, the state is forced to exercise control over the activities of natural monopolies. Natural monopoly industries have high economic efficiency, which is the main reason for the need to regulate their activities.

State control consists of ownership of a controlling stake and special antimonopoly legislation that determines methods of regulation and control of natural monopoly industries and consumers subject to preferential or compulsory services.

State regulation is applied primarily in public sectors: communications, gas, electricity, and water supply. Enterprises that are subject to regulation are:

– The majority of their business consists of services designed to wide circle consumers;

– Funding occurs using huge amounts of money;

– Business development affects the improvement of public welfare and industrial development in a particular territory.

There are three ways to regulate natural monopolies:

1. Direct government regulation.

The essence of such regulation is determined, as a rule, by special legislative acts. For example, the Federal Law “On Natural Monopolies” of August 17, 2006. It defines industries that are classified as natural monopolies and the provisions for their regulation.

There are several problems with such regulation. Firstly, there is a need to create a body of state control over the activities of a natural monopoly. In this case, there is a danger that not public interests will be taken into account, but, first of all, the interests of the ruling groups. Secondly, it is difficult to accurately determine the production costs of the producer of goods in natural monopoly industries. And this is a necessary part of regulation.

2. Bidding for usability and effectiveness in different conditions.

This method of regulating a natural monopoly is associated with the use of the mechanism of economic organization. This is bidding for a franchise, that is, bidding for the right to conduct such activities. In this case, the shortcomings of not the economic, but the administrative system appear. With this method of regulation, a contract is concluded with the manufacturer who offers the best conditions.

3. Price discrimination.

This method is used both by natural monopolies themselves in order to increase net income, and by the entities regulating them in order to reduce the negative effect of the activities of monopolies. This is the sale of goods at different prices to different buyers. The main condition for price discrimination is the impossibility of reselling the good. Price discrimination is divided into three categories depending on the method of implementation:

1. First degree.

This is the sale of each unit of a good at the price of its demand. In this case, the demand curve for the monopolist becomes the marginal revenue curve. Discrimination of this degree is extremely rare.

2. Second degree.

The monopolist does not sell every unit of the good, but certain quantities of it at different prices.

3. Third degree.

Only if industry demand appears in the form of separate groups of consumers with different demand functions.

Natural monopolies very often use price discrimination in regulation.

According to the Law “On Natural Monopolies”, there are two methods for regulating natural monopolies:

1. Price regulation.

Its essence is to determine and establish fixed prices for goods and services, or their maximum level, or maximum coefficients for changes in prices for goods in natural monopoly industries. This procedure is fixed by special regulations.

There are several methods of price regulation:

– Marginal cost method.

– The state controls that the price set by the monopolist is equal to marginal costs. This ensures efficient production and consumption of products.

– Average cost method.

– The price must be equal to average costs. With this method, fewer goods may be produced than needed for an efficient economy as a whole. On the other hand, the monopolist knows in advance that all his expenses will be compensated, that is, there is no need to minimize costs.

– Method of establishing a price ceiling.

– This method usually leads to product shortages.

– Subsidizing natural monopolies.

This is a method of price discrimination in which some consumers receive products at lower prices at the expense of others who pay more.

It turns out that industrial enterprises subsidize tariffs for the population.

2. Non-price regulation.

The essence is to identify consumers who need service, establishing the level of their provision, taking into account the need to protect the rights and interests of citizens, ensure state security, protect nature and cultural values. The resources needed to produce any product are limited and sometimes completely exhausted. This allows you to selectively sell products to different consumers. The government intervenes to protect the interests of all consumers.

The body regulating natural monopolies determines which method to use for regulation. This decision is made after careful analysis of the specific regulated entity.

In order for state policy in the areas of activity of natural monopolies to be most effective, state control is necessary:

1. Preliminary control.

This is a mandatory submission of an application for consent to carry out any transactions, as well as the submission of other necessary information to the relevant authorities.

2. Follow-up control.

This is a mandatory notification to the natural monopoly regulatory body about actions performed on the subject of the monopoly.

Subjects of natural monopolies are in a special position. Hence the need arose to limit their economic activities. Subjects of natural monopolies do not have the right to refuse to enter into contracts with individual consumers for the production of goods if they have the opportunity to produce such goods. Subjects of natural monopolies are obliged to provide access to markets for goods and services, to produce goods and services regulated by the Law “On Natural Monopolies”. They are also required to provide reports on their work and draft investment plans.

2.3 Prospects for the development of Russia’s accession to the WTO

natural monopoly product market

With all its large-scale potential, the modern Russian economy can develop effectively only with active interaction with the world market for goods and services. The market reforms ongoing in the country require the same. In turn, the rules of the game in the world market in the context of globalization are now determined by countries collectively, with the decisive role in this of the World Trade Organization (WTO), which unites about 150 states and covers over 95% of world trade turnover.

In a strategic perspective, Russia should join the WTO. Only this can be the final choice of Russian business as a whole. However, the rules and regulations of the WTO create for it a fundamentally new organizational and legal operating environment, and this causes a mixed reaction in the country.

The purpose of Russia's accession to the WTO is to avoid actual isolation in the world economic system. Obtaining better than existing and non-discriminatory conditions for access of Russian products to foreign markets;

Access to the international mechanism for resolving trade disputes;

Creating a more favorable climate for foreign investment by bringing the legal system in line with WTO standards;

Expanding opportunities for Russian investors in WTO member countries, in particular in the banking sector;

Creating conditions for improving the quality and competitiveness of domestic products as a result of increasing the flow of foreign goods, services and investments into the Russian market;

Participation in the development of international trade rules, taking into account their national interests;

Improving the image of Russia in the world as a full participant in international trade.

Benefits from Russia's accession to the WTO:

– Russia can gain access to new service markets.

– Russia will be able to influence the formation of international trade rules.

– Adaptation of our legislation to international standards is a positive factor for domestic business.

– Industry and regional lobbying for new laws will weaken.

Costs of joining the WTO:

– Protecting many industries from foreign competition will be significantly difficult.

– Budget revenues from import duties will decrease.

– Liberalization of tariffs will make the import of goods from abroad more attractive, and the attractiveness of investment in production will decrease.

– Accession to the WTO does not guarantee against the application of anti-dumping measures against our goods.

Russia will become a full member of the World Trade Organization in the summer of 2012, thus completing a difficult journey that began in 1993, when it applied for membership in the club of 153 market economies. In Geneva, the working group on Russia's admission to the WTO approved the final report and sent a recommendation on admission to the Council of Ministers. On December 15, 2011, the Council of Ministers made a positive decision on Russia's accession to the WTO. The document comes into force 30 days after ratification by parliament, which is six months away.

The last obstacle to Russia's accession - Georgia's disagreement - was overcome through the mediation of Switzerland.

Russia, which represents a huge market of more than 142 million consumers, will reduce customs duties on imports of cars, chemical products, sugar, wood, pulp and others. On average, duties will be reduced from 10% to 7.8%; for agricultural products - from 13.2% to 10.8%; duties on industrial products will be reduced from 9.5% to 7.3%. As the head of the delegation at the negotiations on Russia's accession to the WTO, Maxim Medvedkov, said, customs duties on imports, which increased during the crisis of 2008-2009, will return to the initial level, including new cars (from 30% to 25%). The reduction in customs duties will occur in stages over eight years, depending on the industry. Russian enterprises exporting steel and chemical products will benefit most from joining the WTO.

The agricultural sector, on the contrary, is afraid of competition. Russia has committed to halving subsidies to agriculture and livestock from $9 billion to $4.4 billion in 2018, but government support for agriculture currently stands at $3.5 billion. As for energy, natural gas producers and suppliers will be guided by market principles, although for domestic consumption the Russian authorities will continue to subsidize energy prices, in accordance with the norms of their social policy.

Russia has agreed to accept the terms of the Vienna Convention for the Protection of Intellectual Property Rights, including actions against Internet sites that illegally distribute copyrighted products. Foreign banks will be able to open their branches in Russia, but international insurance companies will have to wait nine years.

Repeatedly it seemed that the negotiation process was about to end, but each time the deadlines were shifted. In the summer of 2009, Vladimir Putin announced that Russia would like to join the WTO along with Kazakhstan and Belarus, its partners in the Customs Union and active supporters of economic integration in the post-Soviet space. Subsequently, Russia refused to join the WTO as a group. As Medvedkov said, Russia will facilitate the entry of Kazakhstan, which is already in its final stage, and Belarus, which still has a long way to go.

Conclusion

In this work, I studied in detail the essence of natural monopolies, their occurrence, activities, and characteristics. I also found out that natural monopolies are industries that need to be regulated. This is the problem with natural monopolies.

It should be noted that the main negative side of monopolization is the excessive power of monopoly firms. The circle of those who can conduct business is steadily narrowing and making the entire economy monopolistic. It is difficult or almost impossible for new companies to enter the market, which destroys the very structure of entrepreneurship. The insufficient influx of new companies into the market prevents the development of healthy competition, as a result of which companies have no incentive to improve labor efficiency. All this does not contribute to the development of the economy as a whole and hinders the emergence and development of new competitive enterprises. The lack of effective tax and legal systems is also not conducive to business development. As a result, many companies operate based on short-term prospects, withdraw money abroad, and are reluctant to invest it in production. All this has a negative impact on the country's economy. “Personnel monopoly” also has an effect, when all key positions in business and government are occupied by people who think in terms of the Soviet system, do not have the skills to work in market conditions and do not want to create these conditions. All this exacerbates the problems that Russia faces on the threshold of the 21st century. In such conditions, only those enterprises that have a unique business or Western companies are able to survive. Monopoly has its positive sides, but they are very few. As for small or medium-sized businesses, despite the many measures and half-measures for its formation and development, to survive in modern conditions They practically can't. And it is on such business that the country’s economic growth is built, and therefore the growth of the population’s well-being and social stability in society. Russia has little choice: either a cautious movement with the expectation of the emergence of a middle class, or tough measures to remove the “shackles” from economically active subjects, creating real preconditions for the rapid growth of our economy." In such a situation, the role of corporations that decide success increases even more initiated reforms to rebuild the economy, which are able to bring the Russian economy onto a trajectory of sustainable growth.

At this stage, the problem of monopolization and unfair competition ceases to be purely economic - it is increasingly becoming political and social. Undoubtedly, in some cases the existence of a monopoly is justified and necessary, but these processes must be strictly controlled by the state to prevent abuse of its monopoly position.

Thus, state regulation of natural monopolies is one of the main factors ensuring the normal functioning of the economy. If the enterprise is not state-owned, then its regulation boils down to the following: either prices are set at the level of the average costs of the monopoly, or two-component tariffs are applied.

The essence and meaning of any antimonopoly policy is to use the benefits of a large-scale economy and neutralize its possible negative consequences associated with weakening competition. It is the combination of these two approaches that constitutes the most intractable legal and economic problem, which varies depending on the situation.

Antimonopoly legislation should be reasonable and thoughtful, and its application by employees of regulatory agencies should be a regulatory mechanism of the market, but nothing more, since an overly strict implementation of antimonopoly policy can lead to a large imbalance in the existing market relations and cause dissatisfaction on the part of employees of large firms.

A decisive role in creating a favorable competitive environment in the market is played by antimonopoly legislation and the activities of antimonopoly authorities, the correct behavior of which contributes to the stabilization of the entire economy as a whole.

But here another problem arises, namely that an industry monopoly that has been taking shape for decades cannot be quickly replaced by a free and self-organizing market, because the establishment of competitive relations is not a one-time immediate action, but a long, complex process, and for a considerable number of enterprises - disastrous . Only those enterprises that provide higher quality goods, relatively lower prices and quick turnover will be able to survive.

So, the state's antimonopoly policy does not mean the total destruction of monopoly. It involves the preservation of certain types of monopolies, ensuring their state regulation.

Thus, in the field of creating a legislative and institutional framework for regulating natural monopolies, some important and necessary measures have been taken, but much remains to be done both in terms of building an effective regulatory system and in terms of restructuring industries, which will create a more compact and manageable sphere regulation.

List of sources used

1. Avdasheva S. B. Competition support policy: antimonopoly regulation and restructuring in the industries of natural monopolies: training manual/ ed. Avdasheva S. B.: Publishing house “New Textbook”. - 2004, - P. 189.

Albegova M.N., Emtsov R.G., Kholopov A.V. State economic policy: experience of transition to a market. Under the general editorship. Professor, Sidorovich A.V. M., 1998.

Belous V. R. Modern economics: a multi-level textbook / ed. V. R. Belous - Rostov n/a. : publishing house "Phoenix". - 2002, - P. 154.

Bovykin V.I. Financial capital in Russia on the eve of the First World War. M., 2001

Bushuev V., Kryukov V. Development of the Russian oil industry: a view from the perspective of ES-2030

Wilson J., Tsapelik V. Natural monopolies of Russia // Questions of Economics, 2002, No. 11.

Gorodetsky A., Pavlenko Yu. Reforming natural monopolies // Economic Issues. 2000. No. 1.p.137

Law of the Russian Federation on natural monopolies // Economics and life. September 2008, No. 35.p.28

Brief economic dictionary.

Microeconomics course. Textbook. Edited by R. M. Nureyev. 2000.

Course of economic theory: Textbook / Ed. ed. prof. Chepurina M.N., Kiseleva E.A. Kirov: Publishing house "ASA", 2009.

Micro and macroeconomics. Encyclopedic Dictionary. Under the general editorship of G. S. Vechkanov, 2001.

Microeconomics: theory and Russian practice. Ed. A.G. Gryaznova, A.Yu. Yudanova. M., 2005.

State regulation is applied primarily in public sectors: communications, gas, electricity, and water supply. Enterprises that are subject to regulation are:

Most of their business consists of services aimed at a wide range of consumers;

Funding occurs using huge amounts of money;

Business development affects the improvement of public welfare and industrial development in a particular territory.

There are three ways to regulate natural monopolies:

1. Direct government regulation.

The essence of such regulation is determined, as a rule, by special legislative acts. For example, the Federal Law “On Natural Monopolies” of August 17, 1995. It defines industries that are classified as natural monopolies and the provisions for their regulation.

2. Bidding for usability and effectiveness in different conditions.

3. Price discrimination.

1. First degree.

2. Second degree.

The monopolist does not sell every unit of the good, but certain quantities of it at different prices.

3. Third degree.

Only if industry demand appears in the form of separate groups of consumers with different demand functions.

Natural monopolies very often use price discrimination in regulation.

According to the Law “On Natural Monopolies”, there are two methods for regulating natural monopolies:

1. Price regulation.

There are several methods of price regulation:

· Marginal cost method.

The government ensures that the price set by the monopolist is equal to marginal cost. This ensures efficient production and consumption of products.

· Average cost method.

Price must be equal to average cost. With this method, fewer goods may be produced than needed for an efficient economy as a whole. On the other hand, the monopolist knows in advance that all his expenses will be compensated, that is, there is no need to minimize costs.

· Price ceiling method.

This method usually results in product shortages.

· Subsidizing natural monopolies.

This is a method of price discrimination in which some consumers receive products at lower prices at the expense of others who pay more.

It turns out that industrial enterprises subsidize tariffs for the population.

2. Non-price regulation.

The body regulating natural monopolies determines which method to use for regulation. This decision is made after careful analysis of the specific regulated entity.

In order for state policy in the areas of activity of natural monopolies to be most effective, state control is necessary:

1. Preliminary control.

This is a mandatory submission of an application for consent to carry out any transactions, as well as the submission of other necessary information to the relevant authorities.

2. Follow-up control.

This is a mandatory notification to the natural monopoly regulatory body about actions performed on the subject of the monopoly.

Natural monopolies are organizations (commercial and non-commercial) that produce (sell) goods (services), the satisfaction of demand for which is effective in the absence of competition due to the technological features of production, and goods that have stable demand with a significant change in price due to the impossibility of completely replacing them with other goods. Creating a competitive environment in the market under conditions of a natural monopoly is impossible or economically ineffective at the current level of development of science and technology. In natural monopolies, the volume of supply and demand is determined to a decisive extent by technology, and equipment and other elements of the production cycle are difficult to mass produce and duplicate. These include energy, a number of modes of transport, communications, water supply, etc.

Natural monopoly enterprises, in the absence of regulation, turn into oligopolies, reduce production volumes, set monopoly prices, which causes prices to rise in related industries. Therefore, in natural monopolies, regulatory methods go beyond traditional antimonopoly legislation.

Natural monopolies are obliged to serve all clients without discrimination, and to submit information to the executive authorities that is a trade secret for other enterprises. Tariffs for products (services) are regulated by the state and subsidies from the budget are allowed. Enterprises of natural monopolies cannot be liquidated without permission from government bodies. The executive branch is responsible for the functioning of natural monopoly industries before the representative branch.

The most radical form of regulation of natural monopolies is the transfer of enterprises to state ownership, the creation of special state bodies to manage natural monopolies, exercising direct control to ensure a balance of interests of producers and consumers.

In Russia, regulation of natural monopolies is carried out primarily by the MAP of Russia and the Federal Energy Commission of the Russian Federation (FEC of Russia). MAP of Russia controls transport and communications organizations, including 63 federal airports, 27 large and 15 especially large sea ports, 39 large river ports, 17 railway departments, 800 transport terminals, 2,700 communication operators. The regulatory framework is the laws “On Competition and Restriction of Monopolistic Activities in Commodity Markets”, “On Natural Monopolies”, “On the Regulation of Tariffs for Electrical and Heat Energy”, “On Federal Railway Transport”, the Decree of the President of the Russian Federation “On Certain Regulatory Measures” natural monopolies" (dated February 28, 1995 No. 220). Each type of natural monopoly has its own regulatory scheme.

The main object of regulation in natural monopolies are prices and tariffs for their products (services). In world practice, the state either prohibits monopolists from having excess profits, or redistributes excess profits in its favor, or fixes the contractual level of prices and tariffs in the interests of both producers and consumers.

In the previous system, prices for the products of natural monopolies were calculated on the basis of cost calculation, i.e. costly method, etc. deliberately underestimated. After the liberalization of the economy, they quickly began to rise, causing a sharp rise in prices in the manufacturing industries. This led to a spiral of non-payments in industry, a decline in the competitiveness of products in the domestic market and the expansion of foreign suppliers. Currently, regulation of prices and tariffs for the products of natural monopolies has acquired national significance.

The Government of the Russian Federation approves a list of goods (services), prices for which on the domestic market are subject to regulation by federal executive authorities and executive authorities of constituent entities of the Russian Federation. Regulated prices are applied by all enterprises, regardless of their legal forms and forms of ownership.

To neutralize the costly pricing mechanism, enterprise costs are controlled, a maximum level of prices (tariffs) is introduced with a parallel limitation of individual cost items and a revision of the initial standardized indicators.

MAL of Russia and FEC of Russia set prices (tariffs for products (services) of natural monopoly entities based on justified costs of their production, taking into account:

Taxes and other payments;

Costs of fixed production assets;

Investment requirements for reproduction;

Depreciation charges;

Projected profit;

Distance of consumers from the place of production of products (services);

Compliance of the quality of products (services) with consumer demand;

State subsidies and other measures of state support for natural monopolies;

Social significance of services;

Inflation rate.

With the participation of interested federal executive authorities, antimonopoly authorities analyze the economic results of the activities of natural monopolies and submit proposals to the Government of the Russian Federation on measures to limit the rise in prices (tariffs) for their products (services). It should not exceed the price index for industrial products.

Organizations that violate the legal norms of state regulation of prices (tariffs) are liable: they are charged the entire amount of excess revenue received and a fine in the same amount, and in case of repeated violation, a fine in double amount.

Another direction of state regulation of natural monopolies is their structural restructuring. It provides, in particular, for the separation of regulated and unregulated activities. Each monopoly has accompanying industries that are not essentially monopolies. For example, gas transportation is a monopoly activity, but its production can be organized on a competitive basis.

The interdepartmental commission for the preparation of plans for the structural reform of natural monopolies is studying the functioning of the federal and regional markets for products (services) of enterprises (interaction of market entities, formation of tariffs and prices for various consumers, features of contractual relations). The commission receives the necessary data from federal executive authorities and organizations, regardless of their form of ownership and subordination. Proposals of the Reform Commission, requiring decisions of the Government of the Russian Federation, are submitted in accordance with the established procedure.

The IMF and other financial organizations lending to Russia insist on their recommendations, which provide for the dismemberment of the leading natural monopolies RAO UES of Russia and OAO Gazprom. In the electric power industry, the state has been proposed to regulate only transmission networks, and privatize generating power plants and distribution units. This does not meet the state interests of Russia.

The set of regulatory measures includes determining the composition of consumers subject to mandatory servicing by one or another natural monopoly entity, monitoring the implementation of investment programs, the use of stabilization funds, the conclusion of certain types of transactions, stimulating through prices (tariffs) the quality of products produced and services provided, as well as meeting the demand for them, accounting for costs separately for monopoly and competitive activities. Subjects of natural monopolies purchase products (services) for their own consumption in accordance with the procedure provided for placing orders for the supply of products for state needs.

The regulatory body has the authority to send mandatory instructions to the natural monopoly entity on concluding contracts with consumers and making changes to them. Effective regulation of natural monopolies is achieved by ensuring maximum independence of control and regulatory bodies and the absence of lobbying for the interests of monopolists in government bodies.

The Federal Energy Commission of Russia maintains a Register of natural monopolies in the fuel and energy complex, which are subject to state regulation and control (engaged in the provision of services for the transmission of electrical and thermal energy, transportation of gas through pipelines, oil and petroleum products through main pipelines). The inclusion of a natural monopoly entity in the Register does not depend on its market share. This Register is maintained separately from the register provided for by the Law “On Competition and Restriction of Monopolistic Activities in Product Markets”, as well as from the register of energy supply organizations.

In natural monopolies, the volume of supply and demand is determined to a decisive extent by technology, and equipment and other elements of the production cycle are difficult to mass-produce or duplicate (this is energy, a number of modes of transport, communications, water supply, etc.). Those. A natural monopoly occurs in a market when one large firm is able to produce a product at lower costs than several smaller firms. A natural monopoly is characterized by a decrease in average production costs with an increase in output at any volume, so that the production efficiency of a large firm is higher than that of small firms.

Natural monopolies largely determine the entire structure of production and consumer prices, influence economic and financial processes, and the dynamics of household incomes.

The reasons for the emergence of a natural monopoly can be:

Features of a technology that has positive returns to scale for any volume of output;

Savings on diversity of a multi-product company that produces different types of products using the same production facilities;

Insufficient market capacity compared to minimum efficient output.

If the industry is a natural monopoly, this gives the firm the ability to charge a price above cost and limit output below what is socially optimal. Those. enterprises of a natural monopoly cannot be organized on the basis of free competition (then they turn into oligopolies and, when production volumes are reduced, set monopoly prices, which generates an increase in prices in other industries). Such an industry requires certain measures from the government to achieve efficient production and allocation of resources. The executive branch is responsible to parliament for the functioning of natural monopoly industries.

The main forms of state regulation of natural monopolies are:

1. Pricing for the products of natural monopolies;

2. Limitation of the profitability of the company - a natural monopoly;

3. Regulation of ownership relations for firms operating in the natural monopoly market.

1. Prices and tariffs for products of natural monopolies are the main object of regulation. Pricing schemes for natural monopoly products have the overall goal of reducing the loss of social welfare from monopoly power without sacrificing production efficiency.

The Government of the Russian Federation approves a list of goods (services), the prices of which are subject to regulation on the domestic market. Prices (tariffs) for the products of natural monopolies sold to enterprises are set on the basis that their increase should not exceed the increase in prices for manufacturers of industrial products (excluding light and food industry products) predicted by the Russian Ministry of Economic Development.

One of the problems associated with pricing a natural monopoly product is the problem of product quality. Under regulated prices, the company has no incentive to improve the quality of the product. Moreover, at a given government-set price, a firm can increase profits by reducing production costs by reducing the quality of the product. In the absence of competition in the market, a decrease in product quality does not have a significant impact on its position. Theoretically, the state can use two levers: the inclusion of quality indicators in the list of regulated standards and the practice of compensating consumers for losses at the expense of the manufacturer if the quality of the product decreases below the acceptable level. But this does not create incentives to improve quality.

2. Direct regulation of prices for products of a natural monopoly by the state can be replaced by control over the level of profitability. This is the method used in US practice. Establishing a maximum rate of return compared to an unregulated natural monopoly leads to lower prices and increased sales. From the point of view of society, limiting the rate of return leads to an increase in welfare. The state either prohibits monopolists from having excess profits, or redistributes excess profits in its favor so that competition can be balanced.

However, many economists believe that rate of return regulation has significant spillover effects on the investment decisions of the regulated firm. There is so-called excess investment (the company seeks to substitute capital resources for other used factors of production).

3. The transfer of enterprises to state ownership is the most radical form of regulation of natural monopolies.

One of the possible ways to reduce society's losses from monopoly power, alternative to direct regulation of the company's activities, is to stimulate competition in the natural monopoly market. The most difficult issue is the problem of determining the optimal intensity of competition. In relation to potentially competitive segments of the sphere of activity of a natural monopoly, government policy should be to stimulate the entry of new firms and reduce barriers to entry into the market.

In a number of cases, the gain in production efficiency provided by a single producer does not compensate for the losses to society from the abuse of monopoly power. Then it is advisable for the state to reorganize the natural monopoly industry by disaggregating manufacturing firms. In those industries where reorganization or deregulation is not possible or desirable, alternative way strengthening competitive elements is the development of competition for the right to enter the industry, for the right to be the only supplier of a given product.

The state sells to a natural monopoly the right to carry out one or another type of activity in the form of franchising. A similar method of government regulation is used in such natural monopoly industries as oil production, freight transportation, television and radio broadcasting. The advantage of franchising is that it provides an effective limitation on the activities of the monopolist, since there is always the threat of non-renewal of the contract if its terms are not met.

Natural monopolies and their regulation Natural monopolies are an industry in which long-term average costs are minimal only if only one firm serves the entire market.

A natural monopoly may exist as a result of barriers to entry for competitors, government privileges, or restrictions on information.

A natural monopoly has high increasing returns to scale and production costs are much lower compared to perfect competition or an oligopoly.

A natural monopoly is based on features of technology that reflect the natural laws of nature, rather than on property rights or government licenses. Forced dispersal of production across several firms is ineffective because it would increase production costs.

Areas of activity of natural monopolies:

Transportation of oil and petroleum products via main pipelines;

Gas transportation through pipelines;

Services for the transmission of electrical and thermal energy;

Rail transportation;

Services of transport terminals, ports and airports;

Public electric and postal communication services.

In actual practice, the application of price regulation for the products of natural monopolies faces a number of problems. The very determination of the level of average costs from the point of view of the validity of including certain types of costs in the costs poses a significant difficulty. Another concern is that price controls may increase X-inefficiency.

2. Antimonopoly policy regarding natural monopolies

2.1. Regulation of natural monopolies

The high economic efficiency of natural monopolies makes their fragmentation absolutely unacceptable. This, however, does not mean that the state can refrain from regulating natural monopolies. After all, their uncontrolled activities can cause significant harm.

As monopolists, these structures are trying to solve their problems primarily by increasing tariffs and prices. The consequences of this for the country's economy are the most devastating. Production costs in other industries are increasing, non-payments are growing, and interregional ties are paralyzed.

And this is not an abstract theory. The entire Russian business press in recent years is full of complaints from industrial enterprises about energy prices, etc.

At the same time, the natural nature of a monopoly position, although it creates opportunities for effective work, does not at all guarantee that these opportunities will be realized in practice. After all, there is a mechanism of X-inefficiency. Indeed, theoretically, RAO UES of Russia could have lower costs than several competing electric power firms. But where are the guarantees that it wants to keep them at a minimum level?

At the minimum level, that is, through Ramsey pricing: raise prices relative to marginal cost in inverse proportion to the elasticity of demand. This rule can be represented in mathematical form as follows:

Where P is the price of product i;

MC is the marginal cost of producing product i;

E is the elasticity of demand for product i at its price;

K - constant (selected so that the break-even condition is satisfied)

This rule can be formulated this way: reduce the output of all products and services in equal proportions until total revenue equals total costs.

The main way to combat the negative aspects of natural monopolies is through state control over pricing of natural monopoly goods or the volume of their production (say, by determining the circle of consumers subject to mandatory service).

2.1.1. X-inefficiency.

The main feature of the market behavior of monopolists is X-inefficiency. The fact is that in all other types of markets, competitors are forced, willy-nilly, to maintain this indicator at a high level. If a company does not, for example, reduce costs to the lowest possible level, its products will be more expensive than those of its competitors, and people will stop buying them.

In the case of a monopoly, this natural limiter disappears - the monopolist has no competitors. That is why monopolistic firms tend to reduce the efficiency of resource use. All unnecessary expenses - from the salary of a worker loitering during the workday to the unbridled luxury of the offices of senior managers - can easily be included in costs. And the buyer, deprived of choice, will be forced to pay for them. In general, X-inefficiency refers to mismanagement of a business that leads to increased costs.

2.2. Maximizing production levels

Price regulation of the activities of natural monopolies involves the forced fixation of maximum prices for the monopolist's products. Moreover, the consequences of this regulatory measure directly depend on the specific level at which prices will be fixed.

Figure 1 shows a common variant of regulation, in which the highest acceptable price is fixed at the level of intersection of marginal costs with the demand curve (P=MC=D).

The main consequence of setting a maximum price from the point of view of the behavior of a monopolist firm is a change in the marginal revenue curve. Since the monopolist soon cannot raise the price above the above level even at those volumes of production where the demand curve objectively allows this to be done, his marginal income curve from position MR shifts to position MR, coinciding with the maximum allowed price value P. In fact, if the maximum price of electricity is fixed at 27 kopecks. for 1 kW/h, then each additional kilowatt sold will generate income equal to this amount, and the marginal income curve will degenerate into a horizontal straight line passing at this level.

Next, the MC=MR rule comes into force. Like any other firm, the monopolist himself, without any government coercion, will strive to bring the volume of production to Q, corresponding to the point of intersection of the marginal revenue and marginal cost curves. Rits.1 clearly shows other advantages of this method of limiting monopolistic prices: a significant increase in production is achieved (Q>Q) and prices are reduced (P
But the described method of regulation also has a drawback: the price level set by the state is in no way related to average costs, i.e. he can, by the will of the state, secure both the receipt of economic profits (Fig. 1a) and the incurrence of losses (Fig. 1b). Both options are undesirable. The presence of constant economic profits from a natural monopolist is tantamount to a tax on consumers. By paying inflated prices, they increase their costs with all the ensuing negative consequences (reduced demand for their products, decreased competitiveness, etc.). But consolidation of losses is even more dangerous. A natural monopolist can cover them in the long term only through government subsidies, otherwise he will simply go bankrupt. And this opens a wide path to wastefulness. Since soon there is no hope for profit one way or another, and the state will still cover the losses, the monopolist can only benefit by wasting public funds. High salaries for managers, inflated staff, huge entertainment expenses - all these are hidden forms of enrichment at the expense of the treasury. In other words, X-inefficiency in this case reaches the highest level.

2.3. Ensuring self-sufficiency

Another guideline for setting maximum prices can be the point of intersection of the average cost curve and the demand line (P = ATC = D). Since average costs in this case are exactly equal to the selling price, the natural monopolist operates in this case without losses and profits. Thus, the main problem of the previous regulation method is removed.

In Fig. 2 shows that this approach to regulation also solves the problem of increasing production (Q>Q) and lowering prices (РМR). It is obvious that the monopolist, by hook or by crook, will strive to stop production at the level Q and not bring it to Q. Since demand at price P will be exactly Q, then there will be a shortage in the market (Q> Q).

Citizens of large Russian cities experienced something similar in the early 90s. The Ministry of Railways stopped repairing electric trains, and fewer and fewer of them were on the lines every day. But they all disappeared as if by magic as soon as ticket prices were raised.

Thus, the second approach to price regulation is also not ideal. In its pure form, it causes commodity shortages and therefore requires additional coercive measures in relation to monopolists. The most common of these measures in modern Russia is the compilation of lists of consumers to whom the monopolist has no right to stop supplying.

2.4. Reforming the structure of Russian natural monopolies

In addition to price regulation, reforming the structure of natural monopolies can also bring certain benefits - especially in our country. The fact is that in Russia, within the framework of a single corporation, both the production of natural monopoly goods and the production of goods that are more efficiently produced in competitive conditions are often combined. This association is, as a rule, of the nature of vertical integration. As a result, a giant monopolist is formed, representing an entire sector of the national economy.

RAO Gazprom, RAO UES of Russia, and the Ministry of Railways are the three pillars of “monopolism in Russian style,” the clearest examples of such associations. RAO Gazprom, along with the Unified Gas Supply System of Russia, includes geological exploration, production, instrument-making enterprises, design and technological structures, and social facilities. The Ministry of Railways is in charge of both infrastructure - railways, stations, information systems - and non-monopoly activities - contracting, construction and repair organizations, catering enterprises.

The essence of the intensively discussed reforms in our country is this: it is proposed to develop competition in those types of activities of natural monopolies where it can be achieved. That is, competition between companies providing preventive maintenance and repair of water supply and sewerage systems in an apartment is probably the only way to protect consumers from the arbitrariness of modern remote control systems, electronic control systems, etc. Only if there is competition, residents will not have to wait weeks for a plumber to be called.

It is obvious that the separation of natural monopoly and potentially competitive sectors should not be forced and mechanistic. After all, not only competition, but also production integration has its potential to reduce costs. Even in countries with very strict antimonopoly regulations - Japan, the USA, Germany - the main scheme for organizing energy is the energy system, i.e. concentration of generating capacities and transmission networks in one hand.

The idea of disaggregating the energy industry by creating independent regional energy systems requires even more careful study. The level of competition in the industry is unlikely to increase, but the isolation of regions will increase. In addition, the country’s unified energy system provides savings, since it allows the use of the “sleeping” capacities of the western regions during these hours to cover the daily peak consumption in the eastern part of Russia and vice versa (benefits of horizontal integration).

When discussing the reform of Russian monopolists, one should keep in mind their position in international competition. For example, RAO Gazprom is the largest international corporation. Its restructuring could undermine Russia's position in the global gas market. In general, it is obvious that reforms of structures that include the natural monopoly sphere should be carried out in stages, with great care and analysis of each stage of transformation.

3. State and market methods of regulating tariffs of natural monopolies

3.1. The need for state regulation of tariffs

There is a strong belief in the need for state regulation of tariffs of natural monopolies. The use of state regulation is considered justified in cases where a certain product (service) is produced by a single economic entity, provided that competition between similar enterprises is ineffective for technological or economic reasons, and the increase in production volume of a single entity is accompanied by a decrease in unit costs.

However, the concentration of production and the ability to dictate their terms to the market often contribute to inflating prices for their products, inflating costs in the case of state regulation of tariffs and discrimination in relation to other market entities. And the real state of affairs of the monopolist is carefully hidden information.

The need for state regulation of tariffs has not been and is not being questioned. At the same time, it is often forgotten that price regulation is, in accordance with Article 6 of the Federal Law of August 17, 1995 No. 143-F3 “On Natural Monopolies,” only one of the methods for regulating the activities of natural monopolies. Moreover, the mandatory use of this method is not legislated; it can only be applied.

The state often takes the path of direct regulation of prices for the services of natural monopolies, the main objectives of which are:

Achieving a balance of interests of consumers and subjects of natural monopolies, ensuring the availability of the goods they sell;

Determining the tariff structure based on the principles of fair and efficient attribution of costs to tariffs for various consumers;

Encouraging natural monopolies to reduce costs and unnecessary employment;

Using the capabilities of price regulation mechanisms when implementing a stabilizing macroeconomic policy.

However, direct regulation of tariffs in itself does not mean that government policy in the field of natural monopolies is being implemented effectively.

3.2. Advantages and disadvantages of state and market methods of regulating tariffs

Today the government has fairly compelling reasons to abandon state regulation of tariffs for natural monopolies. Comparative analysis Such regulation with market regulation seems to be of interest (Table 1). In this case, market regulation refers to the regulation of natural monopolies within the framework of antimonopoly legislation.

When tariffs are set administratively, the monopoly's incentives to reduce costs are weakened. Monopolies focus on “knocking out” the highest possible tariffs. At the same time, responsibility for the level of tariffs falls on the state. Of course, if government agencies do not accept the monopolists’ proposals, the latter are forced to work to reduce costs. However, these are precisely forced steps on their part.

The abolition of direct price regulation will give a tangible impetus to natural monopolies to optimize their own costs. Finding yourself on an equal footing with other subjects economic activity situation and subject exclusively to the norms of antimonopoly legislation, natural monopolies will receive a greater incentive to reduce costs rather than inflate tariffs. Constantly risking falling under sanctions from regulatory authorities. Cost reduction in many ways becomes natural rather than forced.

Table 1 - Advantages and disadvantages of various methods of regulating tariffs of natural monopolies from the point of view of the state

Market regulation

1. The state solves the main problem - it does not allow tariffs to increase longer than it considers necessary.

2. Ease of control over the level of prices for products of natural monopolies.

Possibility of administrative influence on the activities of natural monopolies.

4. Taking into account social consequences when setting tariffs.

1. Natural monopolies strive to set the highest possible tariffs.

2. The state is responsible for the level of tariffs assigned.

1. Reducing government costs associated with the practice of setting tariffs.

2. Concentration of all control functions in one (antimonopoly) body.

3. In general, it is not profitable for monopolies to inflate tariffs, since there is a threat of sanctions from the antimonopoly authority.

4. Natural monopolies have a greater incentive to reduce costs than to increase tariffs.

1. It is difficult to prove the fact of abuse of a dominant position by natural monopolies.

2. The mechanism for resolving such cases through the judicial system has not yet been worked out.

3.The processing of the case may take a long time.

In addition, the effectiveness of market control will be manifested in a reduction in government costs associated with the constant revision of tariffs, as well as with the financing of government bodies performing the functions of state regulation of tariffs.

The main disadvantages of the market mechanism for regulating tariffs are related to the shortcomings of the current antimonopoly legislation. However, these shortcomings do not relate to the exclusivity of natural monopolies as objects of antimonopoly control, but to the general shortcomings of competition legislation, which also manifest themselves in competitive sectors of the economy. Thus, it is worth talking in general about improving antimonopoly legislation, including in relation to the regulation of natural monopolies.

Natural monopolies themselves are in a dual situation (Table 2).

On the one hand, centralized tariff setting eliminates many problems. They are not responsible to the antimonopoly authorities even if they set inflated tariffs; monopolies are actually insured against unsuccessful investments, since costs will be included in tariffs, and therefore transferred to consumers; there is no need for major cost cutting.

Table 2 - Advantages and disadvantages of various methods of regulating tariffs of natural monopolies from the point of view of natural monopolies

Government regulation

Market regulation

1. Shifting responsibility for the level of tariffs to government bodies making appropriate decisions.

2.Lack of control by antimonopoly authorities.

3. The possibility of establishing higher tariffs than with market regulation.

4.There are no incentives to reduce costs.

5.Insurance against unsuccessful investments, since the costs will be passed on to consumers.

1. Tariffs cannot be set higher or lower than those determined by the government of the Russian Federation.

2.You cannot unilaterally change tariffs.

3. Reducing costs is sometimes simply profitable, since tariffs can be reduced by the amount of cost reduction in the next period.

4. When setting tariffs, the interests of natural monopolies are not fully taken into account.

1. Tariffs are set by the monopoly itself. Consequently, at the pricing stage the state does not interfere in the company’s activities.

2. Regardless of the level of tariffs, natural monopolies have the opportunity to prove their validity through the court.

1. Responsibility for establishing inflated tariffs to the antimonopoly authority.

On the other hand, there are no less significant disadvantages. Administrative control does not allow natural monopolies to independently build a strategy for any long period.

Liability to antimonopoly authorities in the case of market regulation can hardly be considered a disadvantage. In fact, one regulatory body is being replaced by another. At the same time, the actions of antimonopoly authorities are clearly more transparent and predictable. In addition, even in the event of sanctions from regulatory authorities, monopolies will always have the opportunity to appeal the verdict in court.

In addition, this kind of responsibility, generally speaking, can be considered an advantage. After all, it will force natural monopolies not to beg for tariffs, but to optimize their activities, refusing additional costs, while simultaneously introducing progressive management technologies.

For consumers of the services of natural monopolies, it is also possible to highlight the advantages and disadvantages of state and market regulation of tariffs (Table 3).

Perhaps the main advantage of government regulation for consumers is the government’s consideration of the social aspect. That is, regardless of economic prerequisites, the state always looks at the population’s ability to pay for the services of natural monopolies. In crisis situations, the state can take even more radical measures and deliberately reduce tariffs in order to smooth out the consequences of crises. As practice shows, prices still take their toll. However, in the short term, consumers can indeed hope that the government will take their interests into account.

The disadvantages include the fact that throughout the entire period of economic reforms (with the exception of the period 1991 - 1992), tariffs of natural monopolies grew at a higher rate compared to prices for products of almost all other sectors of the economy. This means that the state was not able to keep them at least at the level of average economic indicators in the long term. That is, it can be stated that, starting from 1993, the consumer overpaid for the services of natural monopolies.

It is also important that government regulation does not leave the opportunity for consumers to protest established tariffs. In conditions of market pricing, there is always the opportunity to file a claim in court.

Table 3 - Advantages and disadvantages of various methods of regulating tariffs of natural monopolies from the point of view of consumers

Government regulation

Market regulation

1. Tariffs cannot be higher than those established by the government of the Russian Federation, that is, the social aspect of the problem is taken into account.

2. Tariffs are set for a certain period.

1. Tariffs are set at a fairly high level, as evidenced by the comparative dynamics of tariffs in regulated and unregulated industries.

1. In general, it is not profitable for monopolies to inflate tariffs, since there is a threat of sanctions from the antimonopoly authority.

2. In case of excessive tariffs, it is possible to file a claim with the antimonopoly authority.

1.If a monopoly abuses its position, the burden of additional costs falls on consumers.

From the point of view of consumers, the main advantage is that it becomes generally unprofitable for monopolies to increase tariffs, since there is a threat of sanctions from the antimonopoly authority. With state regulation there is no threat of sanctions. Thus, the effectiveness of market regulation turns out to be higher compared to state regulation.

At the same time, it is necessary to take into account that there is no traditional threat in the market environment, when competitors’ prices are lower, because the position of the monopolist is preserved.

4. Development prospects and consequences of natural monopolies

4.1. Economic consequences of monopoly

Despite the fact that the market under monopoly conditions is equilibrium, and the monopolist can have efficient production, monopoly markets are inefficient. Under monopoly conditions, the market price of a product is higher than the marginal cost of its production, which indicates an inefficient allocation of resources.

A monopoly market is smaller than a competitive market and operates at average long-term costs above the minimum, which indicates lower efficiency in the use of resources. By producing too little and selling it at too high a price, a monopoly reduces social welfare.

Let us assume that the demand function D is linear, the firm’s marginal costs are equal to MC (Fig. 3). In this case, the monopoly output will be Q against the competitive Q at the corresponding prices P and P. The excess of the monopoly price over the competitive one means that a part of the consumer surplus equal to the area of rectangle A. is redistributed in favor of the monopolist and appropriated by them in the form of monopoly profit. A volume of monopoly output that is smaller than the competitive volume indicates the loss of part of the consumer surplus equal to the area of triangle B, and part of the producer surplus equal to the area of figure C. The total loss of welfare will amount to a value equal to the sum of losses on the part of the consumer and producer, i.e. (-A - B) + (A - C), which will give a loss value equal to (B + C). Therefore, the crux of the problem is not the redistribution of wealth in favor of the monopolist, but the fact that monopoly leads to a net loss of social welfare. Representing the social cost of inefficiency, the net welfare loss is the social cost of monopoly. Moreover, even if part of the monopoly profit is redistributed in favor of consumers through its taxation, full efficiency will not be achieved, since the volume of supply under monopoly conditions is less than competitive.

4.2. Prospects for the development of natural monopolies

It should be noted that only part of the types of economic activities carried out in such industries as the gas industry, electric power, railway transport and communications actually belongs to a natural monopoly. Other types of economic activity can potentially function effectively in a competitive environment, but the creation of a competitive environment presupposes the need for adequate structural changes. For example, production in both the electric power and gas industries, unlike the transportation and distribution of resources, is not objectively a natural monopoly. In railway transport, competition with other modes of transport either already exists, or its emergence is possible if a number of conditions are met. Ideally, structural changes in these industries, allowing maximum use of the competitive forces of the market, will lead to a limitation of the scope of government regulation. However, proper implementation of reconstruction will not only limit the scope of regulation, but will also increase its effectiveness by clearly separating regulated and unregulated business activities. If such activities are not separated and are carried out within the same enterprise, the task of establishing the permitted price level facing the regulatory authorities becomes more complicated due to the inability to accurately calculate the costs that should be attributed to the regulated activities. In the electric power industry, gas industry, communications industries and railway transport, it is necessary to carry out a number of transformations that will help solve the problems described above:

Regulated and unregulated activities should be kept as separate as possible under existing economic, social and political conditions. Separating ledger accounts and balance sheets is a minimum requirement, but a better solution may be to create separate
enterprises for each type of activity. First of all, it is necessary to separate production functions from transport and separation functions. In the same way, it is necessary to transform social infrastructure enterprises:

Regulated activities should be characterized by openness of information to regulatory authorities, which will make it possible to set prices (tariffs) at a level high enough to ensure normal profitability and, accordingly, attract new investments;

Competitive segments of industries must be identified and reorganized in order to create a real competitive environment.

Thus, in the electric power industry, independent diversified companies should be formed that could directly compete in the wholesale market. A competitive environment can be created in the gas industry;

Competition can develop in the above areas only if appropriate conditions are created by regulatory authorities. Thus, electricity and natural gas producers need open, non-discriminatory access to transport systems, and Licensing procedures that define barriers to entry into the relevant markets must be open and non-discriminatory;

The investment process must be brought into line with the requirements of a market economy. In almost all sectors of natural monopolies, investment is financed primarily through rising tariffs. Currently, industry investment and stabilization funds are not an effective means of financing investments and are often used irrationally. Tariff financing of investments should be sharply reduced, and companies should be encouraged or even forced to use debt and equity capital;

In all sectors of natural monopoly, further improvement of the pricing mechanism is necessary. In the gas industry, prices must be differentiated taking into account the cost of delivering natural gas to different regions. It is also necessary to differentiate railway tariffs by region, stopping the centralized redistribution of income between railways.

Cross-subsidization of preferential users at the expense of enterprises, used in all sectors of natural monopolies, must be stopped.

Subsidies that are deemed necessary (for example, for low-income groups of the population) should be provided from federal or local budgets, and not at the expense of other consumers of relevant resources and services.

These are the main transformations of the infrastructures of natural monopolies, promoting their development.

Conclusion

While carrying out the work, I realized that the loss of social welfare and the X-inefficiency indicator are forms of reduced efficiency under monopoly conditions. The reason for the first is not the inability to optimize production, but the second - a lack of competition. Monopoly does not only lead to negative consequences - it also provides some benefits. First, by enabling economic profits, market power creates greater opportunities for firms to innovate and promotes scientific and technological progress, especially when barriers to entry into an industry are low. Secondly, market power leads to savings in information costs, since the brand name itself is already information for the consumer. Thirdly, under monopoly conditions there is the possibility of more fully extracting economies of scale and production at lower costs than under conditions of perfect competition.

To summarize all the work, it follows that:

State regulation of tariffs of natural monopolies should be replaced by market regulation mechanisms (through the application of relevant norms of antimonopoly legislation);

Antimonopoly legislation needs serious reform. The imperfection of the current legislation concerns general provisions and is manifested not only in terms of regulating the activities of natural monopolies, but also in relation to competitive sectors of the economy;

Market regulation of tariffs of natural monopolies, as an alternative to state regulation, is generally a more effective mechanism that allows, in parallel, taking into account the interests of consumers of the services of natural monopolies and the state, the natural monopolies themselves to develop qualitatively.