Development of an effective method of tariff formation for rural areas: the case of Russian Federation

The conducted researches have shown that the features of the housing and communal sector do not allow talking about the possibility of calculating the “optimal” tariff rate. The development of an effective method of tariff formation for rural areas is particularly acute. The use of traditional method to calculate the amount of tariffs for housing and communal services provided to the population and enterprises (called “cost plus” approach) consists in a simple summation of the cost price of a service with a premium that was set directly by a particular housing and communal enterprise within the maximum and minimum values. The authors found that none of the current pricing and tariffs’ setting methods fulfills the requirements for an effective and economically founded tariff policy in the housing and communal services sector. In this regard, the development of a new methodology that will ensure the receipt of compromise tariffs for housing and communal services is required. Compromise analysis, the main purpose of which is to obtain optimal prices, can be used as a basis of such methodology.