The government, within the framework of working groups, is working on the formation of a plan for a possible change in the electricity tariff for the population. What information is already available today about what is planned?
In Ukraine, prices for residential consumers are at a level that is several times lower than the so-called market prices. For this purpose, the PSO scheme (special obligations) is used, in which the state companies Energoatom and Ukrhydroenergo take on the main burden, as compensators for the preferential price for the population. However, now, taking into account the damage to the energy system due to attacks by the RF Armed Forces, the government is thinking about raising the current feed-in tariff for the population. Focus writes about this in the article “Updating bills. Electricity tariffs may increase from April.”
“In Ukraine, the tariff for household consumers has never covered all the costs of producers. It has always been below the economically justified level. And during this period of the war, we see that, in fact, the payment for both distribution and transmission of electricity is increasing, that is, tariffs “Ukrenergo” for these companies is rising. There is a problem of damage due to strikes on facilities, and companies are forced to pay a lot of money for restoration. Plus, we see the general level of inflation and the devaluation of the national currency. That is, objectively, the gap between the set price and the real cost of electricity is growing.” , – Andrian Prokip, expert on energy issues at the Ukrainian Institute for the Future, notes.
According to Volodymyr Omelchenko, Director of Energy Programs at the Razumkov Center, today in Ukraine it is necessary to raise the question of whether there will be a transition to market pricing or whether electricity prices, as before, will be regulated by the state. “If Ukraine intends to join the European Union, then the state should urgently refuse to set prices for electricity, and in the near future move on to market pricing,” Vladimir Omelchenko is sure.
Experts interviewed by Focus say that an increase in electricity prices for the population is long overdue, and the Cabinet itself was going to carry out such an increase in the spring of 2022, but the Russian attack forced the government to reconsider plans. Now it is already obvious that the gap between the tariff paid by the population and the real cost of electricity is already too large.
Yuriy Korolchuk, co-founder of the Energy Strategies Fund, noted that in Ukraine today the price of electricity for the population is lower than the electricity distribution tariff paid by energy companies. “The tariff for distribution today is about UAH 2.2. The tariff for the population, if we evaluate all the costs of companies, and this is how the market value can be calculated, should be about 5-7 hryvnia per kWh,” the expert says.
The level of damage to the power system after the attacks of the Russian Armed Forces is very high, and now companies need significant financial injections
Photo: Pexels
According to Korolchuk, the government is discussing many scenarios for possible changes in the cost of electricity for the population. In particular, they are talking about the first increase in the spring of 2023 – up to UAH 2.5 per kWh, and closer to the start of the new heating season, there may be a second stage of tariff growth – up to UAH 4 per kWh.
So far, no official statements have been made about the planned increase in the electricity tariff for the population. It is likely that a new resolution of the Cabinet of Ministers, which will either extend the current tariffs or prescribe new payment terms, will appear on March 22-29. However, Prime Minister Denys Shmyhal recently said that no matter what decisions are made to save the country’s energy system, social support mechanisms will still operate for vulnerable segments of the population.
“On the part of the government and the president, we can definitely promise that vulnerable segments of the population cannot suffer due to the implementation of any projects to develop, restore, stabilize and develop the energy market in Ukraine. Therefore, we will do this in a very balanced and balanced way, but the path to the development of a civilized energy market, to the gas market is important for Ukraine,” the Prime Minister stressed, Ukrinform reports.
Earlier, Focus wrote that NEURC plans to consider raising tariffs for centralized water supply and sanitation.
As reported, in Ukraine, due to the difficult situation in the energy sector caused by Russian missile terrorism, they may increase electricity tariffs for the population.
