At the meeting on August 11, the Cabinet of Ministers decided to reduce the electricity tariff for households consuming less than 250 kWh to UAH 1.44 per kWh (from the current UAH 1.68). The new rules will come effect from October 1.
At the same time, for those Ukrainian families who consume more than 250 kWh per month, tariffs remain unchanged. According to the latest data of the State Statistics Committee for 2020, there are about 15 million of households in Ukraine in total. If you believe the information announced at the government meeting yesterday, 80% of them consume up to 250 kWh per month.
Considering that the cost reduction for this category of population is UAH 0.24 per 1 kWh, each family (about 12 million households) will save a maximum of UAH 60 per month, and the energy market will lose UAH 900 million.
Although I have doubts about the loss of that amount. Rather, a further increase in the industrial electricity tariff (today it ranges from UAH 2.4 to almost UAH 4.5, depending on the volume of consumption) and stricter verification of subsidies should be expected. The authorities will find compensators either way.
But in any case, given the total debt on the energy market of more than UAH 53 billion, minus UAH 900 million at the end of July this year is a small loss. It is not a great benefit to the population either. Because in fact there was no benefit, no reduction in electricity prices.
Why?
I suggest we figure out.
At the end of 2020, the Cabinet of Ministers of Ukraine abolished the preferential tariff UAH 0.9 per kWh for the first 100 kWh of electricity from January 1 to March 31, 2021 and set a single tariff for household consumers of UAH 1.68 per kWh.
And then each time it continued the validity of this decision. Until Zelensky gave the command to reduce the tariff.
But the decrease came from the price of UAH 1.68.
Let us count. When the preferential tariff was abolished, each household started to pay extra UAH 78 per month for the consumed electric power. (1.68 – 0.9 = UAH 0.78 x 100 kW-hours = UAH 78)
Today 12 million households will theoretically be able to pay UAH 60 less. That is, there was no reduction, but a rise in price by UAH 18 for the first 100 kWh compared to 31.12.2020. At least.
A step forward – two steps back.
Expert of the Growford Institute Valerii Klochko for Channel 24.