The NBU predicts an increase in utility rates and excise taxes—what's the expected timeline?

The National Bank of Ukraine anticipates that the current tariffs for gas, heating, and hot water supply will not be revised during 2024-2025. However, it is expected that from 2026 onwards, these tariffs will gradually begin to increase. This information is outlined in the NBU's Inflation Report for October.

“The NBU expects that the existing tariffs for gas, heating, and hot water supply will remain unchanged during 2024-2025. However, given the challenging situation in the energy sector, it is projected that from 2026, these tariffs will gradually be adjusted to their economically justified levels. The uncertainty regarding the timing and magnitude of tariff adjustments, particularly for energy, poses a significant risk to the inflation forecast. A rapid increase in energy prices or other utility tariffs would lead to an additional contribution to the inflation rate, as well as an increased need for subsidies for the population,” the NBU stated.

They also noted that a prolonged delay in decisions regarding tariff increases for utility services would result in lower inflation levels but would accumulate quasi-fiscal imbalances and worsen the financial condition of state energy companies.

“This will exacerbate the risks of instability in the energy market and diminish the investment potential of the sector, while the pricing pressure will be deferred to the future,” the regulator reported.