Heating subsidies and incentives for energy efficiency in Ukraine
Macroeconomics
| 8 April 2016
In our research on “Should Ukraine have market prices for gas?” we noted that the success of reform depends on four components:
- Gas market liberalisation and competition among suppliers
- Independent regulator of the market
- Improving energy efficiency
- Protection of vulnerable households from rise in gas prices
In this research we examine one of these four components – social protection of the poor. Households prices for gas have been raised in April 1, 2015 and later on the government introduced a new subsidy mechanism. Now it is possible to assess the effectiveness of the mechanism, since the citizens have already felt the consequences of the first phase of the price increase and the new subsidy mechanism has been functioning for almost a year.
This study aims to examine the effectiveness of the subsidy mechanism and its impact on another component of the ‘gas’ reform –energy efficiency.