Is water next after electricity and gas? Will water prices be transferred to market mechanisms?

In Uzbekistan, the policy of gradually liberalizing state-regulated tariffs and services will continue. Following the increase in energy resource prices — natural gas and electricity — water supply services are now also planned to be transferred to market mechanisms. This was stated by Timur Ishmetov, Chairman of the Central Bank of Uzbekistan, in an interview with the influential British publication Financial Times.

Statement to the "Financial Times": What changes await water tariffs?

According to the head of the Central Bank, the government will consistently continue the initiated strategic direction of freely forming prices based on market mechanisms:

• Artificial containment will end: Currently, taking into account the social situation of the population, the government keeps the prices of certain essential services, including water, within a certain limit;

• Gradual transition to market mechanisms: To ensure the financial stability of the sector and attract investment into the system, water supply prices will also be gradually liberalized;

• Continuity of reforms: Price liberalization aims to reduce losses in the sector and encourage efficient use of resources.

The effect of energy reform and new risks concerning the regulator

Addressing financial stability and inflation figures, Timur Ishmetov noted the following important aspects:

• Domestic inflation has been contained: Tariff reforms implemented in the energy resource market provided a serious impetus to eliminating the main drivers of domestic inflation;

• The main threat is in the external market: Currently, the main risks for the Central Bank remain associated with external geopolitical and economic factors;

• International prices and logistical pressure: Rising oil and food prices on world markets, as well as the increasing cost of international transport (logistics) due to global conflicts, may put pressure on domestic prices. The regulator will carefully consider these risks in its future decisions.

Public skepticism: Will water prices rise sharply?

Earlier, the increase in energy resource tariffs had a significant impact on the expenses of the population and businesses. For this reason, news about the transition of water prices to market mechanisms is causing heated discussions among internet users:

• Citizens on social media are expressing concern that water bills could become significantly more expensive following this decision;

• Economists emphasize that along with adapting tariffs to the market, it is necessary to thoroughly develop targeted social compensation mechanisms for low-income and vulnerable segments of the population.

In your opinion, will the transfer of drinking water tariffs to market mechanisms improve the quality of service in the sector, or will it become a heavy new burden on the population's budget? How correct is the decision to liberalize prices to reduce water waste? Leave your thoughts in the comments!