Ukraine should gradually abolish price caps on energy market, PSO on gas sector entities – Enlargement Package
Ukraine should continue to gradually abolish wholesale price caps on electricity in all market segments and public service obligations (PSO) on gas market entities.
The European Commission reached these conclusions in its annual report Enlargement Package, which was published on November 4 in Brussels.
It is noted that the energy regulator, the National Energy and Utilities Regulatory Commission (NEURC), increased day-ahead and intraday price-caps by more than 60% in July 2025. Day-ahead, intraday and balancing markets continue to operate under price caps.
In addition, tariffs are still insufficient for investments and maintenance needed for energy and climate reforms.
"The implementation of the network codes for electricity is incomplete, in particular in areas of capacity allocation and congestion management. In the coming period, Ukraine needs to adopt changes to the indirect taxation of energy market participants," the document notes.
The tariff for gas transmission has raised nearly four times during the reporting period. However, overall, gas market reforms including gradual phase-out of PSO and lifting the export ban on natural gas remain an important priority for Ukraine in view of alignment with EU rules and (re)establishing a competitive market.
"Phasing out of price caps and public service obligations should go hand in hand with setting up a financing mechanism for vulnerable customers," the document notes.
The authors of the document also drew attention to the limited progress made in aligning legislation with the EU's Third Energy Package in the electricity sector. Currently, the package of measures on European integration of electricity, which is key to the full unification of electricity markets, is awaiting adoption by the parliament.