A study of subsidization system from DiXi Group
A new study from DiXi Group, Reform of Subsidies and the Gas Market in Ukraine: From Eating Up to Supporting Vulnerable Consumers, contains conclusions and proposals for the government concerning reform of subsidization system in Ukraine (roadmap).
This publication explains the functioning of the institute of subsidies in the context of stimulating transparency, energy saving and energy efficiency, and analyzes the effectiveness of the first results achieved so far by the subsidy monetization program.
The experts reviewed the following problems of subsidization system and the related regulation of the gas market:
◾absence of transparent accounting of gas consumers and subsidy recipients;
◾flawed and discriminatory system of PSO (placing special obligations on gas market participants);
◾underinvestment of resources and support by the government in energy efficiency and domestic production.
The problems existing in subsidization system were also revealed in a video based on the conclusions drawn by the authors of this study.
The study also contains conclusions and proposals for the government concerning reform of subsidization system in Ukraine (roadmap). In particular, it points out that a comprehensive solution aimed to overcome energy poverty should envisage a phased system of required measures. In particular, a clear control should be introduced over the number of subsidy recipients and the volumes of gas to be allocated to meet the needs of households. Also, the “double” subsidization system should be liquidated by abolishing PSO and creating market conditions for all suppliers and consumers with the option of changing the suppliers. The government program of increasing energy efficiency and energy savings for household consumers should also be expanded and scaled.
This publication and the video were prepared with the support from the International Renaissance Foundation as part of the Project of Increasing Transparency of the Energy Sector in Ukraine. This material reflects the stance of its authors, which does not necessarily coincide with the stance of the International Renaissance Foundation.