Tariffs for 2025: experts do not rule out a rise in utility prices

30 May 2025 16:52

ANALYSIS FROM

Ukrainians were alarmed by the news from the head of the Kyivteploenergo utility company that the tariff for heating and hot water does not correspond to the economically justified one, and Kyiv residents pay 50% less than they should. Such statements are made not only in the capital but also in other regions. How realistic is the tariff increase, when and by how much – found out [Kommersant].

As Konstantin Lopatin, director of the Energosbut JV of Kyivteploenergo, recently stated, there is an economically justified tariff that is calculated annually by our company. However, due to the current martial law moratorium on tariff increases, including for heat and hot water, there is a difference between the actual tariff and the economically justified one. Tariffs for heat from Kyiv’s CHPP-5 and CHPP-6 for residential consumers remain at UAH 969.89 per Gcal until the end of martial law and for another six months afterwards.

After the end of martial law, it is expected that tariffs will be brought to an economically justified level. And it is even possible that Kyiv residents will have to compensate for the difference in payment for all these years. The situation will be similar with other tariffs, the official said.

In its latest inflation report, the National Bank of Ukraine allowed for a revision of utility tariffs in the coming years. So far, the changes have been postponed, but in the future, prices for gas, heating and hot water may rise. In 2025, tariffs are expected to remain unchanged. However, the difficult situation in the energy sector and the need for fiscal stabilization may lead to a gradual adjustment of tariffs to an economically justified level starting in 2026.

In the commentary [Kommersant] economist Oleg Pendzin noted that until peace comes to the country, no one will dare to raise tariffs. Even this year, they decided not to raise electricity tariffs.

Producers always complain and will continue to complain about the lack of funds. They always say that it is difficult for them, and there are many objective reasons why it is difficult, but here, despite the fact that they are all profitable, no one leaves the business. We have the National Commission, whose members are now very afraid of losing their jobs, and they will not take unpopular decisions. In addition, they have already stated that they will not even raise electricity tariffs this year,” Pendzin said.

A spot increase in tariffs is possible

In general, a large increase in tariffs is not expected this year, confidently stated [Kommersant]oleg Popenko, head of the Union of Consumers of Utilities, said confidently: “They will grow in the same way as last year – gradually, by a few percent. This is due to the lack of a clear tariff policy and deterrents from the state.

Another thing is that many utilities dream of raising tariffs. But no one will allow them to do so, and they can say anything they want.

Tariffs for heat and hot water are approved by the National Energy and Utilities Regulatory Commission. And local utilities submit their calculations through local councils. No one will do this on the eve of the mayoral elections. And talk about consumers underpaying is an old song that is worthless,” says Popenko.

There will be no massive increase in tariffs, except that water utilities may raise tariffs individually, as was the case last year in Kyiv and some regional cities, the housing and utilities expert believes.

The Ministry of Communities and Territories Development of Ukraine is already proposing to amend the government’s recommendations on water and water supply tariffs. In addition, this is one of the few utilities not subject to the moratorium. Therefore, the draft law proposes to maintain the government’s recommendations not to raise water and water supply tariffs and to apply them to consumers (population) at the level of tariffs in force as of February 24, 2022.

However, if a decision is made to keep tariffs unchanged, it is proposed to compensate companies for the difference between actual tariffs and the established ones at the expense of local budgets. However, one of the consequences of such a decision may be “a change in the cost of centralized water supply and centralized sewerage services,” i.e., an increase in the cost for consumers.

At the same time, officials emphasize that the decision to set utility tariffs can only be made by the NEURC or local governments.

It is also possible that this year the cost of servicing adjacent territories, garbage collection, etc. will increase, which is already happening in many cities where condominiums or management companies are raising tariffs. But in 2026-2027, according to Popenko, there will be a massive increase in tariffs for everything. And then you can’t envy the debtors: they will have their homes taken away from them.

“I think that our lawmakers will simplify the procedure for collecting utility debts, up to the sale of housing – and it doesn’t matter if it is a debt of 3 thousand hryvnias or 300 thousand,” says Popenko.

Debts for utilities are only growing

In fact, economists say, the increase in tariffs will lead to an increase in household debt. At the same time, no one thinks about how to restructure existing debts, freeze penalties for those consumers who have not submitted meter readings or failed to pay on time.

According to Deputy Prime Minister Oleksiy Kuleba, the debt of district heating companies to Naftogaz has already exceeded UAH 100 billion. And this is only for heat. Back in February 2022, the total debt for utilities amounted to UAH 82 billion, of which UAH 27 billion was for heating. Over the three years of war, the debt for heating has almost quadrupled. The total debt, including gas, water, and electricity, has long exceeded UAH 200 billion.

Author – Alla Dunina

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Мандровська Олександра

Editor