Minister of Finance Oleksandr Danyliuk attended the meeting of the National Council for Reforms to tell about the role of budgetary policy in cutting energy consumption

6/8/16

On June 7, Minister of Finance Oleksandr Danyliuk attended the meeting of the National Council for Reforms and presented his vision of the role of budgetary policy in cutting energy consumption. The meeting’s agenda was devoted to the reform in the field of energy efficiency.

The Ministry of Finance is taking active steps to reform the budget process, in order to optimize the budget and to ensure the effective use of budget funds. Changes in the mechanisms of budget funding shall make it possible to keep the budget deficit at the safe level, to increase effectiveness in planning budget spending as well as to improve the quality and effectiveness of public services for citizens.

According to Minister of Finance Oleksandr Danyliuk, the key goal of the state policy in the field of energy efficiency is to create incentives for citizens, including recipients of subsidies, to implement energy-efficiency measures in their houses. The main reasons for the bloated subsidies are low incomes of the citizens and inefficient energy consumption. "35 billion hryvnas in subisidies are planned in the state budget for 2016 to compensate the increased energy tariffs to the citizens. A further increase in the number of subsidy recipients as well as in the volume of the subsidies is expected in 2017. This poses a huge burden on the state budget. Energy-efficiency measures shall contribute to the systemic solution of this issue by helping significantly reduce the energy costs for households and for the state budget", Oleksandr Danylіuk said.

The Minister of Finance emphasized that the system of social subsidies can and should create incentives for energy efficiency. A possible solution would be to monetize the remaining subsidy funds to finance the modernization of residential buildings for their higher energy efficiency. “Energy efficiency is not the only reason for monetization. We have raised the tariffs and now we need to launch a full-scale gas market, which is impossible without monetization”, Minister of Finance Oleksandr Danylіuk said.

Presentation

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