Energy Tariff Reform in Ukraine

Résumé du livre

Energy sector reforms have for a long time been viewed as one of the most important challenges facing Ukraine. The most visible manifestation of reforms so far has been the steep hikes in energy tariffs for households to 'market' levels, above all for natural gas and central heating. The magnitude of gas tariff hikes in Ukraine and the short time span over which they have been implemented have been unprecedented: they rose nearly ten times within less than two and a half years. Partly due to this, between 2013 and 2015 residential gas consumption in Ukraine declined by about one third and will probably fall by another 9% in 2016 according to our estimations, essentially meaning sacrifice of households' living standards. Because of the higher energy payments, private consumption of other (non-energy) items has suffered as well. This is a disturbing development: the suppressed demand for non-energy consumer goods represents a clear social loss in an economy which has been suffering from a persistent inadequacy of aggregate demand. --