The fair price may increase by 2.5 times: water supply risks becoming significantly more expensive

Ukraine’s water supply systems are in a deplorable condition, and current water tariffs do not cover even the basic costs of their maintenance. As a result, water utilities face difficulties repairing or replacing old pipes, leading to frequent accidents.

This problem has been particularly pronounced in large cities, particularly in Lviv, where about 50,000 people were recently left without water due to an accident, according to Svyatoslav Pavlyuk, executive director of the Energy-Efficient Cities of Ukraine Association.

According to the expert, large cities do not have the authority to set water tariffs independently, as the National Commission determines them under the Regulation of Energy and Communal Services (NKREKS), which reviews and approves water utilities’ financial calculations.

The expert noted that the positions of city administrations and the regulator often do not coincide. The state body is trying to maintain a minimum tariff. At the same time, cities need stable enterprise operations, which require the use of high-quality materials with a long service life rather than the cheapest options that will need to be replaced often.

Currently, the water supply tariff in Lviv is 25.88 UAH per cubic meter, which covers only minor costs: electricity, salaries, fuel, equipment, materials, and depreciation. This amount is not even enough to maintain the networks in proper condition, as Pavlyuk notes.

An economically justified tariff for current repairs should be about 48 UAH per cubic meter. And so that cities can replace worn-out pipes in advance, without waiting for new accidents, the tariff should be about 65 UAH per cubic meter.

Similar difficulties are observed in water utilities in many other cities in Ukraine.