Review of energy subsidies in the context of energy sector reforms in Ukraine
This study evaluates the progress of fossil-fuel subsidy reform in Ukraine since its
launch in 2016 using the OECD “bottom-up”, inventory, approach. It also identifies
major subsidy schemes that need significant reform. The report reflects the energy
subsidy policies and reforms in Ukraine prior to Russia’s full-scale invasion in February
2022.
The analysis covers: budgetary transfers, government revenue foregone (or tax expenditure),
induced transfers in the form of cross-subsidies or below market tariffs and transfer
of risk to government. The study also covers fossil-fuels subsidies to production
and consumption, particularly, for natural gas, coal and electricity generated from
fossil fuels while support for energy efficiency and renewables is considered for
comparative purposes. This report also briefly discusses the taxation and energy pricing
policies in Ukraine that have had direct or indirect impact on the evolution of fossil-fuel
subsidies in the country. Detailed estimates of all individual support measures are
provided in the Annexes to the report.
Published on December 12, 2023
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