Specificity of Price Setting in Power Producing Idustry (The Case of Kaliningrad Region)

Abstract

Regional pricing processes for strategic consumer products (such as products of power producing industry) in local markets are a mobile system of interdependent factors of the external regional space and the inner socio-economic environment. In the context of the existence of the need to provide a set of strategically important products for the regions power sector due to political issues, exclave specificity and sanctions agenda of Kaliningrad Region, the regulation of the pricing process for product of power generating industry is crucial. According to the opinion of the authors of the article, the current situation in the intra-regional market of the power producing industry is developing more dynamically than the regional authorities succeed to react, what is reflected in the new factors identified by the authors of the article. Among these factors the growth rate of prices for products of the energy generating industry over the past 5 years can be mentioned, despite the active development of Kaliningrad regions program for the achievement of complete self-sufficiency of basic goods in the power producing industry (electricity). In order to identify the main trends in the field of price setting in this industry, the authors analyze the data on price dynamics and the volumes of consumption of products of regions energy generating sector, taking into account the development of power generation programs of Kaliningrad region. The analysis made by the authors allows identifying the main problematic aspects of price setting taking into account regional specifics and on their basis to suggest a current pricing scheme in the power producing industry as an applied tool for the regulation and management of demand and provision of products that are strategic for the energy generating industry of the exclave region. Besides, the authors identify the regional specificity of price setting in the energy generating industry, and determine the promising dynamics of the movement of these processes in their problematic and systematic characteristics.