Monetization of subsidies that Ukraine`s population gets from the state to cover the utility costs will allow launching the natural gas market for the population, which will result in consumers being able to choose their gas supplier, Naftogaz CEO Andriy Kobolev said at a meeting with journalists December 28.
”The key to the launch of the gas market for the population is modernization of the system of subsidies,” Kobolev said, adding that he supported the option of monetization of subsidies.
According to him, the current subsidy system does not provide economic incentives for the population to be energy efficient.
”For the market to operate properly on the market, the subsidized population should have the incentives to save… They will save more, we will import less, and this will reduce the price,” Naftogaz CEO said.
As UNIAN reported earlier, the Ministry of Social Policy does not see in the near future the possibility of the transfer of public subsidies into cash, as no necessary conditions have been created to this end.
The Ministry of Social Policy pointed at two options for monetization: the funds for the subsidized households, calculated based on social norms of consumption, goes to the energy companies, or the money goes to the population, when each household receives funds in its own account.
In late November, Deputy Prime Minister Pavlo Rozenko said that the monetization of subsidies, providing for a direct transfer of funds to citizens, will not to be able to guarantee the target use of money.
According to the estimates of the Ministry of Social Policy, the number of subsidized households on in the heating season 2016-2017 will amount to 8.5 million. At the same time, according to the data provided by the Ministry of Finance, UAH 35 billion was laid out for these purposes in the last year`s budget, while in 2016 these expenses will exceed UAH 40 billion.