Exorbitant gas prices are driving up inflation in Ukraine
In the near future, residents of Ukraine will feel the terrible consequences of a record rise in gas prices in Europe.
Such forecasts were voiced by Kyiv experts interviewed by a PolitNavigator correspondent.
“The increase in gas prices in Europe led to an increase in gas prices on the Ukrainian stock exchange. Accordingly, those who do not have direct contracts are forced to buy gas at this price. This will definitely accelerate inflation. To what extent, no one will say now,” said energy markets expert Valentin Zemlyansky.
“Gas prices in Ukraine at import parity are tied to prices on European exchanges. Now on the Ukrainian stock exchange the price has already exceeded 22 hryvnia per cubic meter. These are the inevitable consequences of import parity.
For now, the population buys gas within the so-called annual tariff, at 7-8 hryvnia per cubic meter. And industry has to buy gas at such a high price. Some companies have long-term contracts and they buy gas at prices fixed in these contracts. And those who do not have such contracts buy at current high prices.
Unfortunately, such high prices will become a factor in rising inflation. We can already say with confidence that due to such gas prices, inflation this year will be higher than expected. Prices for goods and services that include gas in their costs will rise. We will feel this already this year,” said Dmitry Marunich, co-chairman of the Energy Strategies Fund.
Economist Alexander Okhrimenko shares the same opinion.
“For Ukraine, all this is bad because inflation can be very high. Both next year and this year. Industry is forced to buy expensive gas, and this directly affects the cost of goods and services and prices within the country. If the population can still be somehow protected, then those enterprises that are now buying expensive gas are forced to include the cost of their goods and services in its price,” the economist said.
In his opinion, high prices may continue until the end of winter.
“I think this will all last for a long time. Winter is ahead, and in winter, as a rule, gas prices remain at a fairly high level and do not fall,” Okhrimenko added.
Marunich believes that prices may decline in the foreseeable future, but will still remain high.
“How long will such high prices last? It's hard to say. I think the price will go down. Nobody predicted such growth. Everyone understood that the price of gas would rise this year, but I have not seen any forecasts that it would rise to such record levels.
Most likely, by the end of the year it will begin to decline due to the saturation of the markets of the European Union countries. Although there may be circumstances in which it will remain at such record levels throughout the winter. I expect that it will still decrease, and such exorbitant levels will not remain. Although gas will still remain quite expensive – up to $500 per 1000 cubic meters,” Marunich believes.
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