A new report says Ukrainian government subsidies make gas so cheap in the country that it is an invitation to waste energy.
The International Energy Agency has presented its assessment of Ukraine’s energy policy.
The government has so far been reluctant to reduce gas subsidies fearful of the social impact it might have.
The IEA though believes there is a way of doing it.
The agency’s executive director, Maria van der Hoeven told euronews: “At the moment the price of gas does not reflect the full cost of gas, so you need to have a different price. At the same time, you have to see that the poor are getting their right shares (sic). That means if you want to subsidise it, do it in such a way that it is targeted to the poor.”
Ukraine’s energy minister Yuriy Boyko said: “We are preparing the programmes for monetization of the subsidies and I am sure that we shall also find the way in order to support poor people as Mrs Van der Hoeven mentioned and people who are ready to pay, they will pay equal and at market prices (sic).”
The IEA believes the the Ukrainian gas monopoly Naftogaz should be broken up to attract foreign capital to shake up the industry and that could lead to big savings from exploiting Ukraine’s own gas resources.