It has become known that the government plans to raise electricity prices for industry. Economists warn that this could lead to deindustrialisation and a loss of the country's industrial potential.
Tariff increase plans
The National Energy and Utilities Regulatory Commission (NEURC) is preparing another increase in the electricity price cap for businesses. The tariff is expected to increase from UAH 15,000 to UAH 17,000 per MWh. The text of the decision's justification is available on the regulator's official website.
According to Taras Zagorodnyi, economist, this decision raises significant doubts from both an economic and political point of view. He notes that such steps could have serious consequences for the Ukrainian industry.
Possible consequences for the economy
Price increases The increase in electricity prices may lead to the shutdown of a number of enterprises that will become unprofitable. The economist emphasises that this actually means the deindustrialisation of Ukraine's economy, the loss of industrial potential that was not destroyed even by the hostilities.
Expensive electricity increases the cost of production, which leads to losses for producers and can lead to higher prices for end users. As a result, inflation and the welfare of the population are affected.
The role of imported electricity and alternatives
Imported electricity occupies only 15-20% of the market and could be replaced by cheaper electricity from Ukrainian NPPs and HPPs. This could reduce pressure on prices and support the stability of domestic industry.
Possible ways to stabilise
According to Taras Zagorodnyi, the introduction of a fixed gas price for generation at UAH 19,000 per 1000 cubic metres could help to normalise the market. This decision could deter further increase in tariffs for electricity and support the competitiveness of Ukrainian enterprises.
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