“NKREKP intends to increase tariffs for electricity transportation by 30% from November 1 until the end of the year, to 313.07 UAH / MWh, and in 2021 it is planned to increase more than twice compared to the current tariff to 501 UAH / MW -hour. Unfortunately, Ukrainian metallurgists have to admit that these increases are becoming a habit for the state regulator, even when there are no grounds.
The previous increase was not so long ago. Just a couple of months ago, tariffs have already increased by more than 1.5 times, and this has already had a very negative impact on the entire Ukrainian industry, especially in the metallurgical industry. Metallurgists consume 25% of all electricity consumed in the country, and up to 60% of all electricity consumption by industry.
Due to the latest regular increase in tariffs for the transportation of electricity, the costs of metallurgists have already increased by billions of hryvnia. This is despite the fact that the metallurgical industry ended last year with a loss of more than 32 billion hryvnia. This year, the amount of losses of metallurgists in the first half of the year exceeded the losses of the first half of 2019.
The economic crisis is only gaining momentum, and when the global economy begins to recover, it is difficult to predict. Therefore, in European countries, states are trying to support industry in order to prevent a collapse in the economy. In our competitors - Europeans, Russians - electricity prices are falling. And in Ukraine, they are growing. And at such a pace that prices will soon exceed the pre-crisis level.
In fact, NKREKP creates a vicious circle. One of the tasks of the Commission is to find a balance in the electricity market. And what is happening now is destabilizing the market. When the tariff for electricity rises, the industry, which provides 60% of its consumption, begins to cut production. Accordingly, consumption is falling, and with it, the supply of power engineers. What does NKREKP do in such a situation? Increases the tariff again. This is how the circle closes that leads to nowhere: production falls - electricity consumption falls - tariffs are forced to increase - production falls again.
And everyone suffers from this - both industry and energy.
So why raise tariffs? Let me remind you that it all started with a debt of tens of billions of hryvnia to the "green" energy companies. How did it happen? The state has undertaken the obligation to buy out "green" electricity, regardless of consumption volumes, at prices that would compensate the investor for investments in "green" energy. These obligations were assumed by the state - not by industry, not by consumers. Therefore, it would be logical for the state to fulfill these obligations - without literally shifting its debts onto the shoulders of industry.
The state must find internal reserves to pay off its obligations. And the law, which was adopted this year, says that the debt should be compensated by issuing government bonds, and in 2021-2022 the green energy tariff should be covered by at least 20% from the state budget. This is the correct government decision. It will allow Ukraine to maintain the image of a reliable partner for investors and will not finish off the industry.
The state should not shift the burden of responsibility to industry. This will lead to the opposite effect, including for the state. Each hryvnia that is taken away in the industry is money that the state budget has not received in the form of taxes. When enterprises begin to close, the loss will be not only direct - in taxes and fees, but also social: due to an increase in the number of unemployed, social payments for unemployment and the like. As a result, the state will pay an order of magnitude more for each hryvnia of the increased tariff.
The same applies to electricity tariffs for the population, which are kept at a low level due to the fact that they are subsidized by the industry. This is also a problem of responsibility: Ukrainian promised low tariffs, and your task is to ensure these tariffs in the country. Solving the problems of the population at the expense of industry in the long run creates the same vicious circle: when industrial enterprises are closed, more and more unemployed people appear in the country who cannot pay electricity tariffs. And instead of creating spirals of economic growth, the NKREKT decision creates a spiral of economic recession.
That is why, from the point of view of economic logic, the state must cover the obligations undertaken by itself at the expense of its own resources - first of all, by issuing bonds of the internal state loan. This is the world practice: it is impossible in times of crisis to pump money out of the real sector of the economy. In addition, Ukrenergo has opportunities to obtain loans worth hundreds of millions of euros from international European institutions.
We appeal to the Cabinet of Ministers of Ukraine, and first of all to the Ministry of Fuel and Energy. Today the Cabinet of Ministers and the Verkhovna Rada can do everything to solve the problem of paying off debts to "green" energy.
