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HomeWorldRising prices for electricity...
June 2, 2024

Rising prices for electricity – what should a financially justified tariff be?

By David
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    From June 1, the formula for paying for electricity services for the population will be changed and the tariff for consumption over 100 kW will increase by almost 80%.

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    .

    This comes as no surprise to a close observer, but what really frightens many is not the increase itself, but the way in which the authorities are going to do it.

    The head of the State Energy Supervision Service, Ruslan Slobodyan, said during the “Unified News” marathon that the increase in electricity tariffs was inevitable and the new tariff is the result of a compromise and careful calculations.

    This is a compromise tariff level, calculations took a very long time – the struggle was for every penny, how to find the optimal balance that would attract sufficient resources, which are now very much needed to restore electrical networks. At the same time, it should also stimulate, to a certain extent, economical consumption of electricity and at the same time, so as not to create an excessive burden on consumers,” Slobodyan said.

    The real cost of one kilowatt-hour of electricity, according to him, is approximately 7 UAH 50 kopecks, while the previous tariff, in force until June 1 (2 UAH 64 kopecks), covered only about 35% of this cost.

    This, according to the official, created a rather serious financial problem for energy enterprises, with which it was still possible to coexist before large-scale attacks on the energy sector, but in the current conditions, when attacks are regularly carried out, an additional need arose for financial resources and international financial assistance, which attracted for restoration was no longer enough.

    Therefore, it was decided to fix the new tariff at 60% of the cost, but this is still not the market price of electricity,” Slobodyan noted.

    A financially justified electricity tariff in Ukraine for the population should be 3.20-3.50 UAH/kW, and not 4.32 UAH/kW, as we saw, energy expert Yuriy Korolchuk said on KYIV24.

    There is an objective reason for increasing the electricity tariff. This means that the tariff consists of two components: the cost of delivery and the cost of energy resources. These components have long gone up in price.

    He says that objectively we can talk about increasing the tariff for the population to the level of 3.20-3.50 UAH/kW, but not 4.32 UAH/kW, as we saw, and for everyone.

    The tariff should be exactly 3.20 UAH/kW, since delivery and distribution costs 2.10 UAH/kW, and the production cost should be 1.10 UAH/kW, this is the production cost. This is what allows nuclear power plants to operate. They supply 90% of electricity to the population,” Korolchuk noted.

    The Ministry of Energy said in a statement that a single fixed price has been set for individual and collective household consumers at 4.32 UAH/kilowatt per hour until April 30, 2025.

    The agency adds that during the heating period – from October 1, 2024 to April 30, 2025 – there will be a preferential tariff for consumers using electric heating installations – 2.64 hryvnia per kilowatt-hour for consumption of up to 2000 kilowatts per hour per month.

    Source: Racurs

    David
    David

    I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.

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