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Viktor Medvedchuk: New round of tariff genocide by Ukrainian government threatens with social explosion

From January 1, 2021, Zelenskyy’s government set new prices and tariffs for housing and communal services – a record high in the history of the country.

First: the price of gas for the population, taking into account delivery, increased to UAH 10,783 per thousand cubic meters (on average in the country).  This is 26.1% more than in November 2018 (UAH 8548.92 per thousand cubic meters), and 1386% more than at the end of 2013 (UAH 725.4 per thousand cubic meters).

The rise in gas prices is taking place against the background of a significant decline in world prices for natural gas.  While in November 2018 the average customs value of gas imported to Ukraine was USD 339.2 per thousand cubic meters, in November 2020 it decreased by 46.2% – to USD 182.5 per thousand cubic meters.  Conclusion: today in the country there are no economic prerequisites for even the slightest increase in prices for natural gas.

On the contrary, according to our calculations, the price of gas for the population should be reduced equivalent to a reduction in the cost of imported gas.  And if we take into account the fact that the enterprise of the Naftogaz group of JSC Ukrgazvydobuvannya extracted in 2019 14.9 billion cubic meters of gas (70.9% of total production in Ukraine) with an annual consumption by households and heating utility company of 15.4 billion cubic meters, the cost of gas must be reduced to the level of its cost.

Second: according to the decrees of the Cabinet of Ministers No. 483 and No. 1325 dated January 1, 2021 the price for electricity for household consumers was fixed at the level of 1.68 UAH / kWh.  At the same time, the rule of determining the preferential price for electricity depending on the volume of consumption (up to 100 kWh) was abolished.  This will hit first the most vulnerable segments of the population, in particular single retirees.  For them, the Ze-government actually increased the electricity tariff by 86.7% – from 0.9 to 1.68 UAH / kWh.

Third: increase of the tariff for centralized water supply and sewerage services in a number of cities.  For example, in the capital and other large cities, the tariff for centralized water supply and sewerage services increased by 25.7% – from UAH 21.756 to UAH 27.35 per cubic meter.

Fourth: the increase in the tariff for the production of thermal energy for the population of 2021 in a number of regions will be up to 49.7%.  Consequently, the increase in tariffs for heating and hot water supply, which, according to experts, could be up to 30%, is a matter of the near future.

On average for 7 years of tariff genocide by Poroshenko – Zelensky, tariffs for housing and communal services (on the example of the city of Kyiv) increased by 871%, in particular: gas price – by 1313%, heating – by 1223%, electricity – by 500%,  water supply and drainage – by 760%, centralized hot water supply – by 559%.  As a result, the debt of the population in Ukraine for housing and communal services in 2014-2020 increased by 446% – from UAH 12.1 billion (2013) to UAH 66.1 billion (as of November 30, 2020).  In November 2020 alone, the debt of the population for housing and communal services increased by UAH 10 billion, and the level of payments decreased to 52.4%.  

The new round of tariff increase from January 2021 creates all the grounds for the deterioration of the already difficult economic and social situation in the country.  On the one hand, an increase in household expenditures on utility bills will lead to a significant reduction in the consumption of other goods and services in the domestic consumer market. This will lead to a decrease in their production, a fall in related industries and transport, a reduction in real incomes, an increase in wage arrears, a reduction in the tax base and an increase in the already huge budget deficit.  On the other hand, having economically unreasonable and criminally inflated energy prices, domestic producers will lose their competitiveness in foreign markets, which will lead to a decrease in exports and falling production levels in general.

As we can see, the Ze-government has openly moved to a new stage of the tariff genocide of the population of Ukraine.  All this is happening amidst a significant reduction in the amount provided in the 2021 state budget for benefits and housing subsidies – up to UAH 36.6 billion.  As a result, a crisis of mass defaults and a sharp rise in social tensions in the country are inevitable.

Having received new payments for housing and communal services in early February, Ukrainians will face a dilemma: to pay them and leave their families without the necessary food and medicines, or to confront the Ze-government.  What form this protest may take is still unknown, but the people’s patience should not be tested in this way. The consequences might be irreversible...


Viktor Medvedchuk,

Chair of Political Council of Opposition Platform - For Life party


Опубликовано: 5 January 2021