During the summer of 2024, Ukraine began a large-scale process of revising utility prices. As of July 1, tariff increases for centralized water supply and sewage have already been recorded in several cities. The Ministry of Communities and Territories Development warned that this trend will affect the majority of settlements in the country by the end of summer.

Deadline for water utilities: August 20

According to the ministry, all water and sewage enterprises are required to submit calculations of economically justified tariffs to local self-government bodies by August 20. Upon receiving the documents, each community (hromada) will make an independent decision: approve the new price, leave the tariff unchanged, or compensate the difference between the actual cost and the current rate from the local budget.

Currently, there is no decision to raise prices simultaneously across the entire country. Each region acts based on the state of its infrastructure and financial capabilities.

Geography of changes and reasons for price hikes

The most significant changes have already been recorded in Uman, Vinnytsia, and Borodyanka. However, the geography of tariff revisions will expand. According to the Ministry of Development, the situation in the housing and utilities sector remains difficult: in many major cities, tariffs have not changed since pre-war times.

Over the past period, enterprise expenses for electricity, reagents, materials, and employee wages have increased manifold. Today, current tariffs cover on average only about 70% of the actual costs of water utilities. Authorities note that a price review is necessary to prevent a deterioration in service quality or a complete shutdown of enterprises.

History of the issue: from NERC to local councils

The need to raise tariffs arose even before the start of the full-scale war. Enterprise debts grew as the state did not compensate for the difference between established tariffs and actual expenses. Oksana Prodan, an advisor to the head of the Association of Cities of Ukraine, noted that by law, the government was supposed to compensate the difference for regulated water utilities, but this did not happen.

In 2023, the National Commission for State Regulation of Energy and Public Utilities (NERC) initiated a price increase for nearly 45 water utilities in large settlements. However, following criticism from the President, the regulator abandoned this step.

The situation changed in March 2024. Law No. 4777-IX transferred the authority to set water tariffs from NERC to local self-government bodies. This gave local authorities the ability to independently set new tariffs if the issue of covering enterprise debts is not resolved otherwise.

Risks for the population and infrastructure

Experts warn that without tariff increases or adequate compensation from budgets, water utilities will not be able to perform their functions. Furthermore, regions are forced to implement plans to increase infrastructure resilience, which requires additional investment in repairs and protecting water supply systems from possible attacks.

Oksana Prodan emphasizes the importance of water for the operation of other life-support systems: "Water is a mandatory component of the heating system. If there is no water, there will be nothing to heat for heat supply. But this is often forgotten".