Ukrainian Businesses Face Electricity Costs of Nearly 20 Hryvnias per Kilowatt, Consumer Union Head Warns

Sharp Rise in Electricity Costs for Ukrainian Businesses

According to ХВИЛЯ: The head of the Union of Consumers of Utility Services, Oleh Popenko, has warned of a critical surge in electricity prices for businesses in Ukraine. He stated that the generation cost, excluding VAT, has surpassed 12 hryvnias. When distribution, transmission, and taxes are factored in, the final price reaches nearly 20 hryvnias per kilowatt. This situation is forcing major changes in how retail chains operate and heightens the risk of a power deficit in the energy system, which could reach 9 gigawatts during freezing weather. This price spike comes as Ukraine's economy continues to grapple with the broader impacts of the ongoing war.

Impact on Business and the Economy

Oleh Popenko noted that while such high electricity costs are becoming the new normal for Ukraine, they are utterly unsustainable for the economy. In some regions, supermarkets are being forced to shut down for half a day or close on Sundays due to prohibitive electricity expenses.

“At this price, running a freezer is a luxury few can afford,” - Oleh Popenko

He also emphasized that in areas experiencing 18-20 hour blackouts, installing and operating a generator is often economically unviable.

Popenko further expressed concern over the actions of the National Commission for State Regulation of Energy and Public Utilities (NEURC). He argued that while the regulator considers the price hikes legal, it appears to be acting in the interests of monopolies, extracting the last funds from businesses through tariffs.

“Effectively, no one cares, and no one intends to regulate this market to save businesses from bankruptcy,” - Oleh Popenko

The rising cost of electricity presents a severe challenge for Ukrainian enterprises already suffering economic hardship. High tariffs could force many retail outlets to close and reduce the availability of goods for consumers. This, in turn, could negatively impact the country's overall economy, affecting employment levels and the population's purchasing power. Given these factors, it is crucial for regulators and the government to find effective solutions to stabilize the energy market and support businesses.