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A DiXi Group expert: the government does not have a strategy to overcome energy poverty in 2020

18 November 2019
A DiXi Group expert: the government does not have a strategy to overcome energy poverty in 2020

Only 4% of the amount to be spent on subsidies is allocated for thermal modernization measures in 2020

The government does not offer Ukrainians a long-term strategy to overcome energy poverty, but, following the example of previous governments, continues to spend huge amounts of money on utility subsidies, DiXi Group expert Serhii Balan told Ukrainian Energy.

"The need to allocate such a substantial amount for subsidies (UAH 48 billion) indicates that a significant proportion of Ukrainian society lives in the conditions of energy poverty, which manifests itself in the inability to pay for the energy necessary for a comfortable life… By making statements like that, government officials admit their inability to offer the society a long-term strategy to overcome energy poverty,” the expert said.

He stressed that by handing out money like previous governments did, the current political leadership does not help poor Ukrainians but only recreates the situation in which an enormous sum of money is spent from the budget every year and the number of subsidy recipients remains the same.

“At the same time, only UAH 2 billion, or 4% of the amount to be spent on utility subsidies, is earmarked for energy efficiency and energy conservation programs. It hardly makes sense to object to subsidies issued to vulnerable categories of population to help them pay utility bills. But in the situation when almost half of the country’s population receives subsidies in greater or lesser amount over the year, [the government] must implement solutions allowing in the nearest future to stop spending cosmic amounts on covering the comfortable level of energy consumption,” Mr. Balan said.

It is worth reminding that when presenting the draft budget for 2020 for second reading, Yuliya Sokolovska, Minister of Social Policy, stated that the government did not change the criteria for the allocation of subsidies, nor did it make the checks on applicants’ income more rigorous. The draft budget for 2020 proposes to allocate UAH 48 billion for subsidies.

Back in October, the government decided to raise, effective May 2020, the minimum amount of utility bills which subsidy recipients are required to pay from 15% to 20% of the income amount. But earlier, the government said that a subsidy recipient should pay not more than 15% of their income.

At the same time, the government stated that the procedure of allocating utility subsidies to low-income households was simplified.