The cost of electricity for industrial consumers in Ukraine has reached 15 UAH per kilowatt-hour for the first time, which is 85% higher compared to previous prices. Experts warn that such a rapid increase in costs for businesses may lead to higher prices for goods on store shelves, including bread and dairy products.
This is reported by Finway
How Tariff Increases Affect Product Prices
Industrial enterprises, such as dairy factories, have already felt the impact of the increased electricity tariffs. In addition to the rising cost of electricity, the additional pressure on production costs has come from the increase in diesel fuel prices used for delivering goods to retail networks. Stores are also reporting higher electricity prices, which leads to an increase in the final cost of products for consumers.
What Influences the Formation of Electricity Prices
Stanislav Ignatiev, head of the Ukrainian Renewable Energy Association, explains that pricing occurs in the wholesale market, where minimum and maximum price limits apply. The main influence comes from the volumes of electricity supplied by Energoatom, solar, and wind power plants.
“There is demand and there is supply. Producers provide their offer regarding the volume of energy released into the grid. The higher the demand with limited supply, as it is now, the higher the price,” Ignatiev explains.
The specialist emphasizes that the current situation in the electricity market is very tense. The rise in electricity prices is solely related to high demand, not to any collusion among market participants. This is confirmed by a recent incident when Kyivvodokanal was unable to purchase the necessary volume of electricity, resulting in residents of the left bank of the capital temporarily being without water supply. Increased costs for electricity and other resources are inevitably factored into the prices of essential products such as bread and milk.