Until the end of 2025, current tariffs for electricity, gas, heating, and hot water supply will not be revised. However, it is assumed that next year a gradual adjustment of these tariffs to their economically justified levels will begin. This is stated in the inflation report of the National Bank of Ukraine for July, as reported by UNN.
Details
In the coming years, a further increase in excise taxes is expected, as well as a gradual adjustment of utility tariffs, but the parameters for revising the latter are an area of uncertainty and, accordingly, a risk for the inflation forecast.
It is noted that the forecast for administrative inflation takes into account the adopted legislative changes regarding the phased increase of excise tax rates on tobacco products until 2028, as well as their establishment in euros.
The NBU assumes that until the end of 2025, the current tariffs for electricity, gas, heating, and hot water supply will not be revised. However, given the difficult situation in the energy sector, it is assumed that in 2026, a gradual adjustment of these tariffs to their economically justified levels will begin.
It is noted that the uncertainty regarding the timing and magnitude of energy tariff adjustments is a separate risk for the inflation forecast. In particular, a significant increase in energy prices to quickly eliminate imbalances in the energy sector will be a source of additional inflationary pressure and will necessitate a significant increase in subsidies for the population.
On the other hand, a longer postponement of decisions regarding bringing utility tariffs in line with economically justified levels will lead to a lower inflation rate, but will accumulate quasi-fiscal imbalances and worsen the financial condition of state energy companies. This will increase the risks of instability in the energy market, worsen the investment potential of the industry, and price pressure will only be postponed to the future.
Addition
The National Commission for State Regulation in the Spheres of Energy and Public Utilities (NEURC) increased the maximum prices in the electricity market by 1.6 times from 5:00 PM to 11:00 PM.