The main carrier of the occupying country, JSC Russian Railways, plans to increase tariffs for freight transportation three times during 2022, in general, by almost 50%.

Russian Railways plans to raise tariffs

In addition, another increase is planned for early 2023. This is reported by the railway magazine Railway Supply with reference to the Interfax agency.

According to the agency, the association of ferrous metallurgy enterprises “Russian Steel” opposed the initiatives of Russian Railways, which proposes to index tariffs on a quarterly basis, taking into account rising inflation, as well as to increase the export allowance for the size of the exchange rate difference.

“RZD’s proposal to quarterly index tariffs for transportation by rail (by 11.7% in the 2nd quarter of 2022, by 18% in the 3rd quarter of 2022, by 20% in the 4th quarter of 2022 and the 1st quarter of 2023 ) will lead to an increase in inflation, as it will force metallurgical companies to include an increase in the transportation tariff in the final cost of products,” the information says.

An increase in the railway tariff will also increase the transport costs for importing raw materials to smelters, which will lead to an increase in the cost of production and the final cost for consumers.

Steel producers note that the increase in export tariffs in certain areas will become a de facto ban for ferrous metallurgy enterprises, and at the same time estimate the total volume of restrictions as of March 22, 2022 at about 4 million tons of metal per year.

Members of the Russian Steel Association are the largest producers of metallurgical products in the Russian Federation, producing 98% of cast iron, 90% of steel and rolled products, and about 60% of pipes.

As previously reported, the next increase in Russian Railways tariffs is planned from April 1, 2022.

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