Sunday08 December 2024
s-ukraine.com

Could electricity and gas rates rise in Ukraine? An expert has shared their forecast for 2025.

Economic logic indicates that maintaining the current tariff levels for an extended period is unsustainable, particularly in the context of rising energy costs.
Эксперт дал прогноз на 2025 год: возможен рост тарифов на электроэнергию и газ в Украине.

Until May 2025, gas and electricity tariffs for the population will remain unchanged. However, after the heating season concludes, a review is planned, driven by the economic situation and the need to restore infrastructure. This was stated by energy expert Gennady Ryabtsev in a comment to the publication "OBOZ.UA".

The current gas tariffs for the population remain profitable for suppliers. For instance, "Naftogaz" is making a profit from the sale of its own produced gas even at current prices. Nevertheless, discussions continue regarding the necessity to link gas prices in Ukraine to volatile European gas indices.

The expert notes that utilizing internal market quotes and implementing exchange tools could allow for setting the gas price for Ukrainians below 10 UAH/m³, which is significantly more advantageous than European tariffs. However, the situation in the electricity sector is much more complex.

Regular shelling of energy infrastructure forces energy workers to allocate substantial resources for restoration, increasing costs that are covered by:

  • budget funds (essentially – taxes from citizens);
  • loans that will need to be repaid;
  • revenues from the sale of electricity to consumers.

Some specialists believe that the transition to market tariffs similar to those in Europe has long been overdue. This would involve abolishing special obligations for state companies such as "Energoatom" and "Ukrhydroenergo," which currently sell electricity to the population at reduced prices. However, this approach requires the implementation of targeted assistance for socially vulnerable groups who may face difficulties paying the new tariffs.

As Ryabtsev points out, from an economic perspective, it is becoming increasingly difficult to maintain the current level of tariffs for an extended period, especially amidst rising costs for energy workers. Consequently, gradual tariff increases may be possible starting in May 2024. However, the government will likely attempt to minimize sharp jumps to support socially vulnerable categories of the population.

We remind that Ukrainians who install alternative energy sources will receive benefits and subsidies for utility payments. At the same time, the limit on the cost of such installations has been raised, and they can now be purchased on credit.

Furthermore, a moratorium on tariff increases still remains in place in Ukraine; however, according to the Memorandum with the IMF, a rise in utility prices is possible in 2025. An increase in gas transportation prices is also not ruled out.