Hot lavash in South Ossetia

photo: Nelly Gabaraeva

In 2016, the electric power tariff was increased in South Ossetia for those who were engaged in their own businesses. This, however, immediately raised a question – would that imply that life will become more expensive?

It is said that if dough is kneaded by hand, bread will become tastier. That is probably the reason why the “Hot Lavash” mini-bakery in Heroes street, Tskhinval, is so popular – here the dough is still kneaded in this fashion.

Another benefit of buying at this place is that lavash here costs RUB 20 [approx. USD 0.30], while in other bakeries it was sold at RUB 25. However, this price – RUB 25, will soon become the recommended retail price.

The electric power tariff was increased to its prime cost amounting to RUB 3.81 for state organizations and commercial enterprises. People in South Ossetia recognise that this is the beginning of the price growth in general, first of all for bread.

According to Rita Bestayeva, owner of the “Hot Lavash” bakery, her business consumes gas but she is not going to further increase the price for bread.

Other businesspeople are not so sure.

William Dzagoev, the Minister of Economic Development of South Ossetia, assured the public that the increase of the power tariff is not going to apply to general consumers and the price for them will remain the same – RUB 2.64 per 1 kW/h.

In his words, the price increase was a mandatory measure. “The government had to subsidize the unitary state-run enterprise called Energoresurs – South Ossetia (South Ossetia Energy Resources). The volume of annual emergency allocations totals over RUB 100 million [approx. USD 1.5 million] which is a heavy burden for the budget,” said Dzagoev.

It is noteworthy that few people in Tskhinvali believe that an increase in the power tariff is not going to affect ordinary consumers.

One comment from social networks:

‘In the end, the increase in tariffs will make businesses increase prices for their products. As a result, consumers – that is the entire population of the Republic of South Ossetia will be at a loss. Another option is to close one’s business. That is the economic benefit.’

The opinions, expressed in the article, reproduce the author’s terminology and views and not necessarily reflect the position of the editorial staff