Gas tariffs in Ukraine for the population may increase

Despite the potential cessation of transit of Russian gas through Ukraine from January 1, 2025, Ukrainian consumers are unlikely to notice immediate changes in gas tariffs. However, in the long term, the consequences can be significant, warns Oleg Popenko, head of the Union of Utilities Consumers of Ukraine.

Every year, the transit of Russian gas brought Ukraine about 600 million dollars , which is an important part of the state budget revenues. If transit stops, the country will lose these revenues, and additional financial resources will have to be sought to compensate.

"Ukraine will have to purchase at least 2 billion cubic meters of gas to fill its own gas transportation system. It will cost approximately 1.1 billion dollars (45 billion hryvnias). Total losses for the budget may amount to 1.7 billion dollars (70 billion hryvnias)," Popenko notes.

The expert predicts that the increase in tariffs will depend on political factors, in particular the approach of elections. If there are elections in the country in 2025, the government may hold back the tariff increase. Otherwise, Ukrainians will have to prepare for a significant increase in prices.

  • Optimistic scenario : tariffs will rise to 10 hryvnias per cubic meter (currently, the average tariff is about 8 hryvnias).
  • Pessimistic scenario : the price may rise to 12-14 hryvnias per cubic meter .

Russian Gazprom is already taking into account the termination of transit through Ukraine after the end of the current contract on December 31, 2024. Although the Kremlin officially says it is ready to continue supplies, Reuters sources say the baseline scenario is a complete halt to transit. This can cause losses to Gazprom in the amount of 6 billion dollars in annual income.

The Ukrainian leadership is faced with a challenge: how to compensate for budget losses and at the same time minimize pressure on consumers. The solution may include:

  1. Increasing domestic gas production to reduce dependence on imports.
  2. Transition to alternative energy sources.
  3. Search for additional international financial instruments.

Western partners, such as the EU, promise to support Ukraine, but the financial burden will largely fall on the shoulders of Ukrainians themselves.

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