Ukraine may cancel budget subsidies for utility tariffs

The Cabinet of Ministers has submitted for consideration of the Verkhovna Rada a draft law "On amendments to some laws of Ukraine in the field of public utility services" (No. 2029a), which envisages the complete cancelation of budget subsidies on tariffs for housing and utility services.

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In accordance with the bill, the determination of prices/tariffs for housing and utility services below the level of economically justified costs for their provision is not allowed.

It is also suggested to exclude from the law a provision under which the courts can address issues of compensation for the losses of enterprises that are related to the determination of prices/tariffs for housing services lower than the economically justified costs for their provision.

It is also suggested to exclude from the law a provision, according to which costs for the compensation of losses of enterprises that are related to the establishment of tariffs for housing and utility services at a level that makes it impossible to generate profit, are financed from the respective local budget.

The government also proposes to amend the law "On heat supply," according to which tariffs shall include the cost of heat and ensure the profitability of a business entity. It is suggested to exclude from the law a provision that if a temporary tariff for heat is set lower than its production cost, taking into account the limit level of profitability, the authority that set this rate shall provide mechanisms to compensate for this difference in the manner prescribed by law.

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