Fixed gas prices: how populism warms up ratings but cools the country in winter

Will we all freeze in the winter? The Russians are trying very hard. We would not like that. And it is logical to take steps that move us away from this scenario. Not bring us closer..

Instead,..

Victory! Gas prices are fixed. The happiness of populism is marching across the country.

What happened? The Russians have been hitting the gas infrastructure all year. Especially actively lately. This could not go without consequences.

As a result, domestic gas production will not be enough. And it will not be enough. The reserves in the storage facilities will not be enough to compensate for this deficit. Here, we would like to say "sincere thanks" to Mr. Chernyshov and Co. who a year ago showed excellent financial results for Naftogaz by selling gas that cannot be sold. As a result of active injection this year (and active attraction of partners' money for this purpose), we managed to restore a certain level. But no more.

So, thanks to the efforts of the Russians, there will be a gas shortage in the country. Does this sound familiar? Yes, 2022 and active Russian attacks on gasoline reserves. Queues, shortages. That's all. By the way, back then we also entered the crisis with a fixed price of gasoline. And until this monstrosity was canceled, a huge deficit remained.

That is, we have experience of what not to do. But we stubbornly repeat our mistakes.

How was the gasoline crisis overcome in 2022? The market. The price became market-based, and people who wanted to make money imported enough gasoline into the country. Yes, the price went up. But people continued to buy despite the "impoverishment". The country went.

Attention, question: why should it be different with gas? And if the laws of the market are the same everywhere, then shouldn't we listen to them? And spend money on subsidies for those who really can't pay, instead of making gas cheap for everyone.

Once again, there will be a huge difference in gas prices for households and industry. Will we remember the Firtash case again, when gas was going a little bit the wrong way? And all this will definitely not contribute to economical consumption. And thus, it will increase the deficit .

So, this decision will lead to:

- increasing deficit;

- growth of corruption risks;

- higher costs for Ukrainian taxpayers, who will pay for everything one way or another (of course, if we don't suddenly receive a $1-2 billion grant from the Norwegians). But we can dream).

And again, these damned popular decisions instead of the right ones. Again, this specter of elections, which are as close as crayfish to heaven.

And if it were only a question of costs. We can say that Europe will pay for everything. Whether it will or not is an open question, but we can say that. In the meantime, we should give up and close our eyes, not looking at the finances of Naftogaz, which will buy expensive and sell cheap. As if it will somehow go away .

But a gas shortage in winter amid at least regional problems with electricity is not a very pleasant story. And populism, instead of market mechanisms, exacerbates this deficit. Just ask the Russians now – we all like the newsreels with the queues in Russia for gasoline, don't we??

Do we want to freeze without cheap gas? Or do we want to be warm and have this gas??

And why the same rake again.. .

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