Tariff imbalances: how much Ukrainian industry will pay for natural gas distribution
16 December 2025 12:45
ANALYSIS FROM 
Ukrainian steelmakers are expecting another tariff increase – this time for natural gas distribution. And they will not be the only ones to feel the additional price pressure. Komersant found out who should prepare for the increase in tariffs and prices.
The National Energy and Utilities Regulatory Commission (NEURC) adopted a draft resolution setting out its intentions to increase tariffs for natural gas distribution in 2026 on December 2. The document has now passed the mandatory discussion stage and is being prepared for approval. Different gas distribution network operators are expected to see different increases: compared to the current tariffs, some may see only a 25% increase, while others may see a 190% increase. There are no plans to adjust the tariffs for household consumers – they remain unchanged. But this does not mean that household consumers will not feel the impact of the new tariffs.
Not only industry is under attack
All stakeholders, as they say in such cases, had the opportunity not only to express their attitude to the proposed tariff changes, but also to offer their own proposals – the discussion of the project lasted 10 days in a non-public format.
But, for example, representatives of the metallurgical industry also expressed their assessments of the proposed changes publicly. In its appeal, Ukrmetallurgprom Association reminded that the mining and metals sector is currently in a difficult situation due to the war, the destruction of infrastructure and falling world prices for steel products, and such a tariff increase could deal a critical blow to the industry.
“Any adjustment of tariffs in 2026 can only be economically justified within the industrial price index, which is no more than 13.6%. The proposed tariff increase of 51-127% is excessive and unacceptable for the mining and metals companies: it could lead to a shutdown of some production facilities, mass layoffs and the risk of losing a strategically important industry for Ukraine’s economy,” Ukrmetallurgprom said.
But it’s not just metallurgists who could face problems if tariffs rise. ExPro analyst Mykhailo Svyshcho explains.
“If we talk about the largest industrial consumers of natural gas, these are metallurgical enterprises, chemical enterprises, and then agricultural companies. So, in fact, they will be the first to be affected. And it will be difficult for utilities now, because they cannot raise tariffs for the population, while they are actually being raised. And they already have large debts,” the expert reminds.
The budgets of local communities will definitely feel the planned tariff changes, as Kharkiv Mayor Ihor Terekhov confirmed a few days ago on Radio NV.
“The National Energy and Utilities Regulatory Commission is raising the tariff for gas transmission. This is a nightmare. This is a loss for utilities. We will need to take funds from the city budget to provide them with financial support, and they, in turn, will pay twice as much for gas distribution,” the official stated.
This means that city budget funds will be spent not on social programs, but on compensation for tariffs. And this is not the only indirect impact of the new tariffs on the average consumer. ExPro analyst Mykhailo Svyshcho explains again.
“For the population, tariffs are fixed. They will not be revised until the end of the war, martial law and six months after it and will remain at the level adopted in ’21. The resolution also states that the old tariffs remain in place for the population and household consumers. In fact, businesses will pay more to cover the deficit in tariff increases. But ultimately, everything will be borne by the end consumer through higher prices for goods and services,” the expert states.
The cost of tariff imbalances
The National Energy and Utilities Regulatory Commission explained its intention to increase tariffs for natural gas distribution in 2026 by the need to provide gas distribution network operators with the funds necessary for their stable operation.
“This increase will allow us to partially compensate for the losses we currently incur,” commented Serhiy Skyba, Head of Gas Distribution Networks of Ukraine, on the expected decision.
Mykhailo Svyshcho, an analyst at ExPro agency, calls the decision a painful one for regional gas distribution companies that maintain the networks.
“They claim that they are facing problems, and it’s not just about insufficient funding for current activities – there is not enough money even to pay salaries to employees in these conditions and with these tariffs. It should be understood that distribution tariffs have not been raised since 2021, and since then a lot has changed, including significant increases in prices for services and goods required to maintain gas networks. Therefore, the increase in tariffs is, in principle, justified, at least if you look at it from this perspective,” says Mykhailo Svyshcho.
On the other hand, he said, there is an understanding that industrial consumers and businesses are going through hard times during the war.
“It is clear that any increase in tariffs, especially for large industrial consumers who consume a lot of gas, such as metallurgists, will certainly have a certain impact on the final price for them. Therefore, they are understandably opposed to such an increase,” the expert explains.
“In fact, in this case, we have a situation where both sides, as they say, have their own truth and their own arguments. In its decision, the regulator should, if not harmonize the positions, at least bring them closer together.
As Mykhailo Svyshcho explains, the tariffs were calculated using a special methodology based on the operators’ reporting data for previous years and forecasts for natural gas distribution volumes for 2026.
“There is a detailed methodology to justify these tariffs. The tariff growth figures for different regions are different, they have a justification and depend on the planned volumes of gas pumping, the volumes of technological losses required to cover the transportation of these volumes over a certain period. They also depend on how large the gas pipeline network is and how much gas is needed to maintain it. That is, there are many factors that actually have an impact. But, of course, not all market participants agree with this methodology and this particular tariff increase,” the expert notes.
It is proposed to increase gas distribution tariffs in stages – from January 1 and April 1, 2026. And, according to Mykhailo Svyshcho, the final tariff options based on the results of their discussion will be somewhat different from those proposed in the draft resolution.
Author: Serhiy Vasylovych
