monopoly in Lithuaniaand problem of energy prices

problem of energy pricesDespite Lithuania produces a lot of energy, because of large output potential, people still suffer from enormously increasing prices, because of stubborn monopoly, and wrong treatment from government.

problem of energy pricesDuring past years, Lithuanian cost per kWh, reached 15 cents – the same as in Sweden, while Lithuania’s GDP per capita is $15,300, and Swedens - $32,200.

Lithuania

Developed countries

“Lietuvos Energija” building opposed to common housing

how to manage these uncontrollable prices?

• eliminate monopoly, initiate their conversion to perfect competition

• set maximum prices, but government is not interested to do so

EU has issued several metods for energy provision system reforms, which new members must apply:• Centralized buyer-seller, but lots of producers• Third party buyers-sellers, which have to show their activities to central administration

particular methods in Lithuania’s case

1) Splitting four largest energy producers, and providers into smaller ones, to initiate competition. Problem – Ignalina’s NPP still remains too strong competitor

2) Opening the market to abroad, especially in Baltic states market, so there are more equal competitors, and competition would be initiated even among the demand side

impossible?

Ignalina NPP case•European union insists closing it, because of safety measures •Largest competitor would be eliminated•Would this be helpful for society?

another method, without eliminating monopoly• Setting maximum prices over energy transportation, and leaving competition in production

• Trafficking companies would have to lower production costs, in order to gain profit

• Government does not want this method too much, because it is major shareholder of energy companies

Thank you for your attention!

Save energy:

• Turn off the lights, when you work or study;• Don’t download stuff with you computer overnight;• Buy maximum 17” television;• Buy gas generator (unless gas provision situation inyour country is the same);• Attend pickets against rising electricity costs;

Otherwise, you soon run out of money, and have to use kerosene light