There’s no escaping the price hikes: Ukrainians may face a significant increase in utility bills
7 May 12:14
Gas, electricity, and heating rates in Ukraine are 2.5 to 3 times lower than market prices. Experts say that sooner or later this will have to change—both the IMF and the EU are already speaking openly about it, as reported by "Komersant Ukrainian" with reference to Telegraf.
“It will happen very soon”: why tariffs are being discussed again
According to Oleksandr Kharchenko, director of the Center for Energy Research, both the IMF and the EU are already telling the Ukrainian side directly: artificial rates will have to be abolished. It won’t be possible to postpone this.
This applies to gas, electricity, and heating all at once. Instead, for those who truly cannot pay market prices, the state must introduce targeted subsidies. Kharchenko reminds us: this model already worked in 2014–2015.
“Gas was very expensive, but people applied for and received subsidies, and no one died. It’s just a very painful political move that everyone is afraid to even talk about,” the expert adds.
What is the gap between what we pay and actual prices
Current rates are not market-based. This is acknowledged by all experts interviewed by the media.
- Electricity. The public pays 4.43 UAH per kWh. For businesses, the price is 2.5 times higher —and that is the market price.
- Gas. Naftogaz sells gas to households for 7.96 UAH per cubic meter. Imported gas costs 30 UAH per cubic meter. The company effectively covers the difference out of its losses.
- Heating follows a similar pattern: households pay about 8 UAH per cubic meter, while the market price is three times higher.
Volodymyr Omelchenko, Director of Energy Programs at the Razumkov Center, confirmed in a comment:
“The population pays 2.5 times less than the market price for commercial entities.”
Formally, low tariffs exist due to PSOs—imposed special obligations. This is a mechanism by which the state compels suppliers to sell energy resources to the public below market value.
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On the one hand, this protects people from sharp price increases. On the other hand, the system relies on companies operating at a loss and hidden subsidies.
Serhiy Makogon, former head of “Gas Transmission System Operator of Ukraine, “ explains: “Our tariffs have remained unchanged for six years now. The situation is similar with both gas and heating. We do not have enough domestic gas to meet all the needs of the population and the district heating sector. Some of the gas must be imported, and Naftogaz sells this portion to the population at a loss.”
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The logical question is: how will this loss be covered? Makogon responds: “If from the budget, are there funds there for this? There is already a 400 billion hryvnia hole in the budget for defense needs.”
The IMF isn’t “demanding” anything—but there’s a catch
Here it is important to distinguish reality from manipulation. Omelchenko draws attention to this separately:
“The IMF never demands anything. The entire plan for receiving funds from the IMF is proposed exclusively by the Ukrainian government,” he says.
According to the expert, it is the government that agrees on measures for macroeconomic stabilization—the IMF merely reviews them to see if it agrees with them.
In other words, Omelchenko calls the claim that “the IMF demands raising tariffs” a manipulation.
But there is another dimension—European integration. The recently adopted law on the integration of Ukraine’s and the EU’s markets provides for a transition to a market coupling system (the integration of electricity markets across different countries, in which prices and supply volumes are determined automatically, as in a single market—Ed.). This means that commercial conditions in the Ukrainian market must align with European standards—and therefore, prices for the public need to be raised to market levels.
Is there a moratorium—and what does it protect?
Important context: Ukraine currently has a moratorium on raising utility rates for the public. It remains in effect until the end of the war and for six months after its conclusion.
“Protected” from increases:
- gas supply and distribution
- heat supply (heating)
- hot water supply
What the moratorium does not cover:
- electricity — rates may increase
- cold water and wastewater disposal
- household waste collection
- maintenance of the building’s grounds (property management fees)
Gennadiy Ryabtsev, an energy expert, notes: decisions regarding heat supply, rent, and grounds maintenance are made not by the Cabinet of Ministers, but by local councils.
“The cost of centralized heating services falls under the authority of local governments. All other components of utility services—from building maintenance to trash collection—do as well,” he says.
Therefore, changes in utility bills are possible even before the end of the war —depending on the decision made by a specific city council.
When and what might increase first
Ryabtsev predicts that changes in utility bills are possible as early as the start of the next heating season—due to decisions by local governments.
As for a comprehensive review of rates—opinions differ here.
Ryabtsev cites the signed memorandums: “The memorandums signed with the IMF emphasized the need to adopt a roadmap for the electricity and gas markets. The deadline for adoption was set at six months after the end of the war.”
Omelchenko draws attention to the plan for integration with the EU market:
“By 2028, the markets are supposed to integrate with the EU market. That is, this is a plan for two to two and a half years—and it will be implemented in stages.”
At the same time, he warns against false hopes: “This isn’t the first or second time that laws and decisions have been passed but nothing has been implemented.”
Who will suffer the most and will subsidies help
If rates rise, low-income families and retirees will be hit hardest—those for whom utility bills already eat up a significant portion of their income.
Omelchenko says: “The government plans to compensate for this through targeted subsidies for low-income households.”
Makogon clarifies:
“Vulnerable groups should not suffer—everyone who needs it should receive targeted subsidies.”
Kharchenko points out that this system has already proven effective: in 2014–2015, when prices rose sharply, subsidies really helped people. The question is whether the budget will be sufficient and whether the system will be targeted enough this time.
“There are no alternatives”: what experts say
Is there any option at all to avoid raising rates? Omelchenko answers briefly: “I don’t think so.”
Makogon explains:
“We have to get used to paying for gas and heat at reasonable prices. Otherwise, the gas production and heat supply systems will completely collapse.”
The question isn’t whether this will happen or not. The question is when and how painful it will be.
At the same time, the government has not yet announced any official plan to raise rates. Omelchenko notes that it is difficult to comment on the government’s intentions while no such document exists: “Only when the plan is published will it be possible to comment on anything. For now, there is nothing to say.”
Ryabtsev confirms:
“I haven’t seen any government officials even drafting proposals to liberalize prices or raise rates for residential consumers.”
Conclusion: We’ll have to pay more, but not tomorrow
Experts are unanimous: the question is not whether rates will rise, but when and how painful the increase will be. No sharp jump is expected in the near future—but no one is promising that the current situation will last forever.
- The moratorium is in effect, but it does not protect against all possible increases in utility bills.
- The market rate is 2.5–3 times higher than the current one.
- A sharp increase in the near future is unlikely, but a gradual rise in certain components is already underway.
- Subsidies exist—but their scope and amount will depend on government decisions.
- The timeline for changes is approximately 2026–2028, if we’re talking about a systemic overhaul.
According to Makogon, prices need to be gradually brought to a reasonable level. Otherwise, the system simply won’t hold up.
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