In July 2022, the Verkhovna Rada introduced a moratorium on raising tariffs for natural gas, hot water, and heating. It was a justified step: a full-scale invasion, millions of displaced persons, destroyed infrastructure. Three years later, Ukraine signed an updated Memorandum on Economic and Financial Policy with the IMF, in which it promised to abolish that same moratorium.
What exactly was signed
The Memorandum fixes the obligation to gradually increase tariffs for gas, electricity, and heating to a level that covers the real costs of suppliers. In parallel, the state must strengthen targeted support for vulnerable households — subsidies will not disappear, but will become targeted rather than universal.
«We are firmly committed to implementing an ambitious reform program to address long-standing structural problems in the energy sector, which have been exacerbated by the war unleashed by Russia»
Memorandum on Economic and Financial Policy between Ukraine and the IMF
The specific start date — 2027 — is not directly enshrined in the document. The increase may begin earlier if the situation at the front allows. The structural milestone — preparation of a reform roadmap — has been postponed from July to the end of October 2025.
Why this has happened before
This is not the first time Ukraine has taken on such obligations. In 2015–2016, during the previous IMF program, the Rada passed a law prohibiting tariffs below economically justified costs. Tariffs were increased — for gas to the level of import prices from Europe, for heat by 75–90%. But within a few years, the government again introduced tariff caps: heat supply companies accumulated debts to Naftogaz, and the system reverted to a subsidy-based logic.
According to Naftogaz data, implicit subsidies — that is, the sale of gas to households below cost — cost the company 60 billion dollars between 2005 and 2015. The 2022 moratorium reproduced the same model, only with different justification.
What lies behind the formula of «cost recovery»
The IMF insists on market pricing not only for fiscal reasons. The Fund believes that without real tariffs, private investment in energy infrastructure — recovery from strikes, network modernization — will not come. The state cannot finance both the war and energy sector reconstruction simultaneously without external capital.
- The moratorium applies to gas, hot water, and heating — but not to electricity and cold water.
- Tariffs for heat and hot water are set at the local level — the memorandum provides for legislative changes to align this practice.
- The amount of subsidies will be adjusted in parallel with tariff increases — in theory, so that the most vulnerable households do not feel the full impact.
The question is not whether tariffs will rise. They will — this is fixed in an international document on which continued financial support depends. The question is whether this time a mechanism will appear that prevents the government from backing down again after the next elections or the next escalation at the front: the previous memorandums had no such safeguard.
