Ukraine should refrain from returning to control over gas prices

The head of the IMF office in Ukraine, Goesta Ljungman, believes that a return to control over natural gas prices is not only an extremely ineffective way of subsidizing households but also leads to the abuse of resources due to corruption and curbing the implementation of energy efficiency, Interfax-Ukraine reports.

“There is a significant part of the Ukrainian population that cannot cover the costs of gas, heat, hot water and electricity. The most effective way to support these households is to identify them and provide them with financial support through the budget so that they can pay their own utility bills,” he said in an interview with the agency.

Ljungman clarified that this support instrument exists in the form of a household subsidy program.

He added that another question is structural – what is the most efficient way to organize the gas market.

“Since 2015, a comprehensive effort has been made to move towards an open and competitive gas market at both the wholesale and retail levels. Significant progress has been made, but a fully functional domestic gas market has not yet been established. Giving households a choice between a wide range of products, including fixed price contracts, is one of many necessary measures,” Ljungman said.

As a reminder, the Cabinet of Ministers of Ukraine published Resolution No. 25 of January 18, 2021, which provides for the introduction of a maximum gas price for the population at UAH 6.99 per cubic meter from February 1 to March 31, 2021.

As reported, NJSC Naftogaz of Ukraine completed the development of the annual gas price.