LFMI study “The Energy Policy: Measures, Possibilities and Directions”

LFMI proposes not to mix the energy policy with politics

On November 29, 2005, the Lithuanian Free Market Institute (LFMI) staged a conference “Market or Politics in the Energy Sector?” to debate the prospects of the energy policy in Lithuania. The goal of the event was to direct the ongoing discussions over the energy issues from interest-seeking to finding proper solutions which would help build a consumer-friendly and viable energy system in Lithuania.

At the conference LFMI presented a study “The Energy Policy: Measures, Possibilities and Directions” which defines and evaluates systematically the problems of the Lithuanian energy sector, presents economic arguments needed to estimate currently debated political proposals and provides recommendations regarding the course of the state’s policy and solutions to the most pressing problems in the energy sector.

At the bottom of LFMI’s recommendations for the energy policy lie the necessity to create conditions for competition and possibilities to deregulate this sector. If principles proposed by LFMI were fully implemented, all monopoly privileges would be eliminated, allowing the energy prices to fall where possible. The implementation of LFMI’s principles would allow maintaining an ultimately low general price level, without inflicting upon the viability of the energy sector and the security of the consumer-preferred energy supply. LFMI’s proposal would help open up new opportunities in those areas where energy prices are artificially reduced today, allowing using the energy resources most efficiently, while social issues would be tackled more expediently than they are today.

The energy policy is one of the strategic fields of LFMI’s activity in 2005-2007. This study was also submitted to relevant official institutions and business associations.