Cyclical issues of pricing of regulated services

Abstract

The article reflects current issues of the formation and regulation of tariffs that have developed in the modern economy. A brief analysis of the historical development of tariff regulation with the assessment of the used methods and ways is conducted. The authors identified expediency of tariff formation and regulation by a single body determining functions and set tasks. The study uses descriptive, analytical, and comparative methods. The article describes a positive example of applying the practice of deregulation with subsequent possible extension to other areas. The reasons of inefficiency of using the marginal indices mechanism are determined and justified, which is directly related to underfunding of the industry and lack of investment components. The question is raised about the fulfillment of the development, or social function by tariff regulation. It is proved that the current tariff system is not able to change the situation of increasing the investment base necessary to stabilise the deterioration of infrastructure. The main components of the current tariff regulation system are identified, and the directions of a new development model are proposed with consideration to the problems found by the study. According to the research results, conclusions are given that reflect the essence of the designated topic for possible solutions to issues existing in the functioning development model.