Utility tariffs will rise in Ukraine: when to expect it

The NBU predicts a gradual increase in utility tariffs, but they will remain unchanged in 2025.

Writes UNN with reference to the Inflation Report.

The NBU envisages a gradual increase in excise taxes and tariffs for housing and communal services, but the timing and parameters of their adjustment remain uncertain, which poses risks to the inflation forecast.

The forecast is based on the assumption that certain utility tariffs (gas, heating, and hot water) will remain unchanged through 2025.

However, the difficult situation in the energy sector and the state budget may lead to tariff adjustments in the coming years. It is assumed that starting from 2026, tariffs may be gradually brought to economically justified levels

The regulator notes that a significant increase in the cost of energy to quickly eliminate imbalances in the energy sector will increase inflationary pressure and require an increase in subsidies for the population. 

A prolonged delay in raising utility tariffs to an economically justified level may curb inflation, but it will also contribute to the accumulation of quasi-fiscal imbalances and deterioration of the financial condition of state-owned energy companies.

This will create additional threats to investment in the sector, increase the risks of instability in the energy market, and price pressure will only shift to the future.

Recall 

The government will not raise tariffs for heat and electricity in the 2024-2025 heating season. UAH 42.3 billion is earmarked for the subsidies and benefits program.