Archive 2006

• 01.12.2006

  Household gas prices in Ukraine: How to combine economic and social requirements

  (Code:V15)

  Gas prices for private households are under strong upward adjustment pressure. Ukraine’s government just decided to implement a new pricing scheme where households will receive domestically extracted gas at rather low prices, but consumption above a specified threshold level will become more expensive. While this is a step in the right direction, the new pricing scheme has important drawbacks and needs further adjustment. We analyze consumption pattern and affordability of gas for Ukrainian households and develop an alternative pricing scheme with more need- and cost- oriented prices and consumption thresholds. Such a scheme would stimulate investments and sets incentives for energy saving. Our proposal includes income transfers to the poorest households to ensure general affordability of natural gas for all households in Ukraine.

  Attached file  (74.1 kb)
  Authors:  Pavel Ferdinand, Чухай Анна
  Tags:  Center of economic research, German advisory group