IMF estimates the cost of maintaining electricity and gas prices in Ukraine
The IMF estimates that fiscal spending on energy subsidies in Ukraine will be 3.7% of GDP per year in 2024-2026. The fund proposes two scenarios for a gradual phasing out of subsidies over three years, which would reduce budget spending by 1.5-3.2% of GDP.
The International Monetary Fund estimates that fiscal expenditures on energy subsidies related to PSO and similar measures will amount to 3.7% of Ukraine's GDP per year in 2024-2026.
The IMF analysts note that the current electricity and gas tariffs only cover 41% and 49% of the corresponding costs, respectively. The volume of the PSO mechanism in the electricity market is approximately 1.8% of GDP, and in the gas market – 1.4% of GDP. An additional 0.3% of GDP is allocated to subsidies for household heat consumers, and 0.2% of GDP – to subsidies for electricity producers from renewable sources.
The IMF proposes that Ukraine gradually phase out PSO (price stabilization) over a period of three years, while increasing electricity and gas tariffs. The fund has developed two scenarios, which differ in the target prices for energy carriers at the end of the transition period. Scenario "A" includes an electricity tariff of 9.7 UAH per kWh, and a gas tariff of 22 UAH per cubic meter, including VAT. Scenario "B" includes an electricity tariff of 6 UAH per kWh, and a gas tariff of 17.2 UAH per cubic meter, including VAT.
According to the IMF, the full package of measures within scenario "A" would provide savings of 3.2% of GDP, while scenario "B" would provide savings of 1.5% of GDP. At the same time, the fund emphasizes that changes in energy prices should be accompanied by adequate social support for the population.