7 - Market Reform, Consumer Protection and Energy Efficiency

Summary

Focuses on consumer protection in the context of energy market reform. Given the region’s energy poverty, consumer protection must be placed at the centre of the reforms. From a procedural perspective, public consultation could make an important contribution to the public acceptability of tariff reforms, but this would require a frank admission of the real causes of energy insecurity in Central Asia, including the highly sensitive topics of corruption and discrimination in favour of strategic enterprises. Judicial practice in Kazakhstan and Kyrgyzstan demonstrates that courts have a role to play in enforcing consumers’ procedural rights. In addition to procedural protection, subsidies are necessary to protect the most vulnerable segments of the population against tariff increases. However, subsidizing the use of energy traps consumers into energy dependency and thus exacerbates the financial impact of future tariff increases. In order to break the vicious circle of low energy pricing that currently undermines Central Asian energy security, subsidies must be channelled away from energy consumption and into efficiency improvements.