The IMF has released a plan for rate changes: when will prices for gas, electricity, and heating go up?
22 July 10:56
The International Monetary Fund recommends that Ukraine carry out a large-scale reform of its tariff policy in the gas, electricity, and heat supply sectors once martial law is lifted. This recommendation is included in the updated Memorandum of Cooperation between Ukraine and the IMF, according to "Komersant Ukrainian"
The IMF notes that the current system of state price regulation and public service obligations (PSOs) negatively affects the financial condition of state-owned energy companies, hinders investment, and increases hidden budget expenditures.
That is why the Fund recommends that Ukraine gradually transition to a market-based pricing model once martial law ends.
What Changes Is the IMF Proposing?
The report states that the government should prepare a roadmap for liberalizing the natural gas and electricity markets.
The document should provide for:
- a gradual transition to market-based tariffs;
- reform of the public service obligation (PSO) mechanism;
- settlement of energy companies’ accumulated debts;
- mechanisms for financing the energy sector’s recovery;
- protection for socially vulnerable households.
SEE ALSO: Ukraine to Receive an Additional $690 Million from the IMF: What Conditions Must Be Met
When might rates change?
The IMF emphasizes that a return to fully market-based pricing is possible only after the active phase of the war ends and martial law is lifted.
After that, the government must implement the prepared roadmap for a phased transition to economically justified rates.
However, the report does not specify a specific date for raising utility rates for the public.
What Will Happen to Social Protection
A separate section of the document is devoted to support for Ukrainians.
The IMF emphasizes that any changes to tariffs should occur only after the creation of an effective system of targeted assistance.
This includes:
- housing subsidies;
- compensation for low-income individuals;
- other mechanisms to protect low-income households.
The Fund emphasizes that social protection measures should offset the potential impact of a gradual tariff adjustment.
The memorandum states that Ukraine must conduct a comprehensive assessment of existing consumer support mechanisms by the end of February 2027. Based on the results of this analysis, the government must determine which social assistance tools are most effective ahead of a potential tariff adjustment.
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Why Tariff Reform Is Needed
According to the IMF’s assessment, the reform should help:
- ensure the financial stability of state-owned energy companies;
- attract private investment;
- fund the restoration of damaged energy infrastructure;
- reduce hidden budget subsidies;
- create a competitive energy market in line with EU standards.
At the same time, the revised version of the memorandum changes the deadline for fulfilling one of the structural commitments. While Ukraine was previously required to prepare a plan for the gradual revision of tariffs by July of this year, that deadline has now been moved to the end of October.
Is the moratorium currently in effect?
Currently, a moratorium on raising tariffs for natural gas, hot water, and heat supply to households remains in effect in Ukraine.
The IMF is not proposing that it be lifted immediately. The document states that the roadmap should outline steps to be taken after the end of martial law, while preparatory measures can be implemented now.
The IMF has concluded its Article IV consultations with Ukraine
Along with the review of the loan program, the Executive Board concluded its 2026 Article IV consultations with Ukraine.
The IMF regularly conducts such consultations with member countries to assess their economic policies, the state of their financial systems, and key risks.
In the case of Ukraine, the main topics were:
- maintaining economic stability during the war;
- financing critical government needs;
- supporting the banking system;
- postwar recovery;
- the transition to a competitive market economy;
- aligning economic policy with the requirements for accession to the European Union.
How much money will Ukraine receive from the IMF?
Following the completion of the first review, the program’s key parameters are as follows:
- total EFF program amount — approximately $8.1 billion;
- duration— 48 months;
- new tranche — approximately $690 million;
- total amount of disbursements already approved—approximately $2.2 billion;
- the remaining portion of the program will depend on further reviews and Ukraine’s fulfillment of the agreed-upon conditions.
IMF funds help finance the state budget, support foreign exchange reserves, maintain the confidence of international partners, and attract additional assistance from other creditors.
Subsequent tranches will depend on how promptly the Ukrainian government meets the program’s quantitative targets and structural benchmarks.
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