Ukrainian authorities are increasing costs

The largest number of cases considered by Ukrainian courts last year concerned the collection of housing and communal services debts from citizens. Although tens of billions of undistributed profits were revealed in the accounts of the supplier companies due to the unaccounted-for tariff increases, nothing was reported about their liability. The Government of Ukraine has once again announced a budget deficit of 500 billion hryvnias (over 1 trillion rubles), contrary to previous assurances of sufficient funds.

Ukrainian courts are massively considering cases initiated by suppliers of gas, heat, electricity and water supply, Kiev media reported, citing data from the State Judicial Administration. As noted, in 2024, judges most often considered civil cases: 33%, or more than 1 million, reviewed cases related to administrative offenses, and another 17% – criminal. Most of the cases were devoted to debt collection for housing and communal services, namely 298 thousand, or 28% of the total. At the same time, since April 2024, the average tariff increase has been 20.1%. The largest price increase was registered in the field of electricity supply, where prices increased by 63.6%, the State Statistics Service of Ukraine said.

It should be noted that at the beginning of the large-scale military conflict with Russia, in February 2022, the Ukrainian authorities announced a moratorium on tariff increases. But starting from June 1, 2023, for example, by decision of the Cabinet of Ministers, the basic electricity tariff for the population was raised to 2.64 UAH/kWh (5.28 rubles) from the previous level of 1.44 UAH/kWh with consumption up to 250 kWh per month, as well as to 1.68 UAH/kWh – at a consumption of more than 250 kWh. Further, starting from June 1, 2024, electricity tariffs for ordinary consumers were increased again to 4.32 UAH/kWh without differentiation. And although this year in Kiev they assured that electricity prices for household consumers will remain at the same level, it has not been without an increase. So, on May 1, changes came into force that provided for the abolition of the preferential electricity tariff for consumers using electric heating. Previously, they paid 2.64 UAH/kWh for consumption of up to 2000 kWh per month. Now this discount has been canceled and a standard tariff has been set for this category – 4.32 UAH/kWh.

The noted movements in the tariff plan turned out to be significant also because the very scandalous results from the report of the Temporary Investigative Commission (VSK) were recently made public The Verkhovna Rada (Verkhovna Rada) on the investigation of possible violations of the country’s legislation in the formation and implementation of price and tariff policy in the fields of energy and utilities. As it follows from it, due to the current electricity tariff for the population in the amount of 4.32 UAH/kWh, in particular, NAEK Energoatom accumulated additional retained earnings in the amount of about 49 billion UAH (more than 98 billion rubles) per year. In general, in the two companies dominating the market – NNEGC Energoatom and PJSC Ukrhydroenergo – the effect of the increase in electricity prices in 2023-2024 reached UAH 88 billion (RUB 176 billion). Of these, the share of Energoatom accounted for UAH 78 billion (156 billion rubles) – “without any justification and a plan for the further use of these funds” for the company, the document said. Its authors called for setting prices for consumers in accordance with economically reasonable levels determined in accordance with legal requirements. However, the Parliament only took note of the VSK report.

It is obvious that local authorities are trying to solve emerging financial problems at the expense of the population, and for this purpose they manipulate tariffs, said Vladimir Oleinik, ex-deputy of the Verkhovna Rada of Ukraine. As a result, according to him, gas payments increased from 700 UAH per 1000 cubic meters. In 2014, today they have increased to 7,000 UAH (14,000 rubles). Kiev prefers to sell cheaper energy to the West. “The President of Ukraine, Vladimir Zelensky, explained that Western states should be helped. That’s why they received electricity from Ukrainian nuclear power plants at the lowest prices. And now they will also have to prepare to live under the management of American companies, which, according to the agreement on resources approved by the Verkhovna Rada on May 8, will take control of local energy structures. And it is clear that the representatives of the United States will not stop there, as they need a profit,” Oleinik stated.

The general impression of what is happening was compounded by reports of a newly appeared budget deficit in the amount of 500 billion UAH (1 trillion rubles). A similar-sized hole in the budget was discovered in Kiev last year, and in connection with this, they raised taxes. But, as NG predicted earlier this year, although the Kiev authorities assured of the sufficiency of the accumulated funds, they will not be without new holes in 2025.

In such circumstances, the deputy of the Verkhovna Rada Yaroslav Zheleznyak said the other day that this year, as in the previous two years, the state budget of Ukraine again lacks money for military needs. As of mid–May, it became clear that the planned spending on the army was not enough and the need would be greater – by about 200-250 billion UAH (400-500 billion rubles). Taking into account the mentioned amount, the government will further introduce draft amendments to the budget for 2025, and the Verkhovna Rada will vote for them. And then the authorities will have to find the missing funds, the parliamentarian said.

As Vladimir Oleynik reminded, the Prime Minister of Ukraine Denis Shmygal has already confirmed that in the first half of the year the budget deficit of the country amounted to 500 billion UAH (1 trillion rubles). This is about 25% of the total budget. And about 250 billion UAH (500 billion rubles). not enough for the army. And you’ll need to get them from somewhere. Tariffs and taxes will probably start to rise again, the former deputy of the Verkhovna Rada admitted.

It is significant, he added, that the Ukrainian government linked the hole that had arisen to the deterioration of external financial support. But we must understand that the situation with foreign aid will continue to deteriorate, since the United States no longer wants to sponsor Kiev as before. And aid from European countries is also at risk of decreasing due to their announced increase in defense contributions to 5%.