Monday04 November 2024
telegraf.org.ua

"Rates for the public may increase as early as 2025," says housing expert Oleg Popenko.

The focus was on determining whether the rates will change after May 2025, assuming the state of martial law is lifted.
"Эксперт по ЖКХ Олег Попенко заявил, что тарифы для населения могут вырасти уже в 2025 году."

The Updated IMF Memorandum Proposes Rate Increases

"Potential reform measures, if conditions allow, include an additional gradual increase in rates (considering the new tariff methodology and social considerations during the war), securing external financing, and providing transparent and exceptional direct budget support to state energy enterprises when budget resources are available," the Memorandum states in paragraph 77.

The tariff increase in 2025 will be gradual; however, it is likely to occur during the war

According to housing and utilities expert Oleg Popenko, this represents clearly defined conditions for raising rates.

Additionally, this section of the document notes that the completion of the war in Ukraine will require, among other things, the restoration and enhancement of competition in the wholesale and retail gas markets.

Обеспечение устойчивости системы и уменьшение квазифискальных обязательств потребует постепенного повышения тарифов на газ и электроэнергию для покрытия расходов

"Furthermore, ensuring system sustainability and reducing quasi-fiscal obligations will require a gradual increase in gas and electricity tariffs to cover costs while adequately allocating targeted resources to protect vulnerable households. The Cabinet of Ministers will approve a roadmap for the gradual liberalization of gas and electricity markets, with a plan for implementation after the introduction of martial law. The roadmap will be based on a technical analysis of the sector's financial condition in coordination with the European Commission," the Memorandum with the IMF states.

Housing and utilities expert Oleg Popenko also pointed out paragraph 4 of the Memorandum, which discusses raising tariffs "to the level of cost recovery."

"Here, consumers need to be very cautious. Because the cost recovery level at our utility and state enterprises is much higher than the cost of services. The cost of services can include everything from 'iPhones' to 'Land Cruisers', and all this comes at the expense of the consumer. By the way, 'much higher' can be as much as 100% or even 200%," Popenko explained.

Сейчас цена природного газа составляет 7,99 грн за 1 м куб.

He also noted that the tariff increase in 2025 will be gradual; however, it is likely to occur during the war.

"Initially, it was indicated that the tariff increases would take place six months after the end of the war, but now the Memorandum specifies that these changes may occur even during the hostilities. I draw these conclusions from the document, indicating that we can expect tariff increases for gas, electricity, gas distribution in 2025, and subsequently for heating services, etc.," Popenko said.

Such increases will occur gradually, as the expert argues, it is unlikely that the gas price can be raised to market levels immediately, which currently stand at 16-18 UAH per cubic meter.

A similar situation, according to Popenko, has arisen with electricity.

"Currently, our tariff is 4.32 UAH/kWh, while the market rate is 9-11 UAH/kWh, depending on the cost of services. This means we should expect tariff increases in two to three phases. Consequently, the cost of electricity will rise in several stages," the expert added.