“Putin has no money.” Russia no longer provides cheap utilities to the occupation

In Russia, payments were indeed cheaper than in Ukraine – and they still are in the occupied territories of Donetsk and Luhansk regions. However, now the cost of utilities there will be even higher in some places than in the free territory of Ukraine. And this despite the fact that the city of Donetsk with a population of one million has been living with a difficult water supply day after day for three years: due to the fact that in 2022 the Russian army destroyed the equipment of the Seversky Donetsk-Donbass canal with attacks.

How exactly did the numbers on the bills change? How are the local population reacting to this? Donbas Realia (Radio Liberty project) tells us.

At the beginning of this year, the occupation administrations have already revised tariffs, including rent. And the next round of price increases looks like this: from July 1, payments have increased by an average of almost 30 percent.

All services are becoming more expensive: heating, gas, cold and hot water, sewage and electricity. And for garbage collection you will have to pay twice as much.

It is promised that tariffs in the occupied territories will gradually increase to "all-Russian standards". That is, this is not the last price increase: the next one, according to propaganda resources, is planned exactly in a year, from July 1, 2026.

“Increased rates have been approved for the ‘new regions’ (as the occupied Ukrainian territories are called in Russia – ed.) as part of the tariff equalization schedule with the Rostov region by 2029,” the occupation “head of the Tariff Committee” of the “DNR” group (the occupied part of the Donetsk region, where the “DNR” group created by Russia operates – ed.) Alexander Alipov told Russian media.

The occupiers are trying to convince residents: they say, they are increasing tariffs in favor of locksmiths. And they complain that the work of utility companies is unprofitable.  

„“The cleaners should receive a good salary to feed their families, so that there is an incentive to go to work,” Yevgeny Drotikov, a representative of the occupier’s utility company, explained to the Russian state agency RIA Novosti, acknowledging that the tariffs have been increased by about 2.5 times, sometimes three times, sometimes four times.

The housing stock in the occupied territories is not actually served by local utility companies; instead, a centralized management scheme created by Russian Deputy Prime Minister Marat Khusnullin operates, says Petro Andryushchenko, former adviser to the mayor of Mariupol on Donbas Realities and now head of the “Center for the Study of the Occupation.”

“This system operates through so-called “wallets” – various “development funds” and structures like the “unified management company,” which coordinates the entire housing sector in the occupied territories. This company is the same for all the occupied territories, and also for part of Russia, as far as I understand. Therefore, they really equalize it regardless of income. Tariffs are becoming more expensive everywhere, to similar amounts in Russia,” Andryushchenko notes.

More expensive than in Ukraine: how much will you have to pay?

“Pro-Russian channels publish information where they calculate what will change for residents after the increase in utility prices, and give these calculations per person per month. So, there the price increase is about 100 rubles (53.5 hryvnia), in other cases - a little more, but in this way they try to show that the increase will not begin and that there is no need to panic. But only a certain part notices that they have carried out the increase in utility prices in several stages - so that during the year these changes would not be very noticeable,” says Valeria Melnik, deputy editor-in-chief of the online media outlet “Tribuna” for Donbas Reali.

Russian media cite the following figures: the cost of electricity in the case of consumption of 150 kW/h will increase by 37 rubles (11 hryvnia - at the average bank rate as of July 12), gas - by seven rubles (two hryvnia) per person per month. Central heating will become more expensive by five rubles (1.5 hryvnia) per square meter of space, water supply - by almost nine rubles (almost two hryvnia) per cubic meter.

Now the average payment for utilities in a small apartment (50 square meters) in the occupied part of Donetsk region will reach 6,000 rubles in the heating season and 5,000 - in the summer (that's 1,500-1,800 hryvnia). In the territories controlled by Kiev, the average bill for the maintenance of housing of the same area will be two thousand hryvnia in the heating season and 1,000 - in the warm season.

Salaries in the cities of Donetsk and Luhansk regions fluctuate between 30,000-60,000 rubles (10,000-20,000), in Donetsk there are vacancies of up to 80,000 (that's 25,000 hryvnia), but they are rare. And it's good if there is work at all. After all, the occupiers are closing mines, the cities on the front lie in ruins, and the enterprises there are destroyed.

The most vulnerable categories of the population (pensioners, low-income residents) have to pay from a fifth to a third of their monthly income for utilities. It is for such cases that the occupiers offer “compensation” (if the payment for services exceeds 15 percent of the family income), but in order to receive compensation, it is necessary to collect certificates, low income does not guarantee automatic compensation from the occupation authorities.

“There have also been conflicts between residents of the Luhansk and Donetsk regions, because the prices for utilities are different, and for residents of the occupied Luhansk region they are higher. Therefore, people ask rhetorical questions to the administration like “do people in the ‘LPR’ earn more?”, says Valeria Melnik.

Without water and trams. How do residents of the occupied territories react to the increase?

“Equalization” of tariffs with “comprehensive Russian standards” is planned for 2029, but it is already hitting wallets.

People complain about the disastrous quality of services, which they mostly don’t even receive: the water is technical, you can’t drink it, the sewage system is worn out, the cities are drowning in garbage, it is collected once or twice a month, and the fee for this service immediately increases by 50 percent.

In addition, people do not understand what justifies the increase in prices, because a few months ago the prices for some types of utilities were already growing.

Social networks are full of angry comments: “We ride in dilapidated minibuses, the entrances have not been repaired since they were built, pensions are not increasing, the heating is turned on at an untimely time and there are problems with it”. Users ironically say: it’s okay, we will save money and sit without electricity.

Russian promises not to raise tariffs for housing and communal services in destroyed front-line cities turned out to be empty words, as did their promise to forgive debts from the beginning of the occupation in the front-line territories, adds Valeria Melnik.

“Later it turned out that no one would forgive and no one would pay for them, so it was a real blow to the local population, because the occupiers once again showed that their words mean nothing,” says the deputy editor-in-chief of the online media outlet “Tribun”.

Petro Andryushchenko calls the situation with public utilities in occupied Mariupol a “collapse”. The head of the “Center for the Study of the Occupation” says: formally there is a sewage system and a water supply in the city, but in fact they only work on the streets. Sewerage floods are recorded at addresses, because the collector is clogged and does not drain the water.

A similar story is happening with the water supply: the reservoirs have already become 70 percent shallower, and the occupation administrations are doing nothing about it.

"The garbage collection is not working: there is no one to take it away, and there is no one to do it, so it is systematically piling up, and landfills are constantly springing up. Today I noticed that the trolleybus wires along Budivelnik Avenue have been removed. This is the entire development of the city - backwards. They are trying to restore the tram lines that were promised. There is only one trolleybus line left - and it is being shortened. If this is development, then this is clearly a step backwards," says Andryushchenko.

The situation with utilities and the supply of basic resources in the occupied territories depends on whether we are talking about rear towns or settlements on the front line, Denis Kazansky, a journalist from Donetsk, tells Donbass Reali. In towns that have been significantly or completely destroyed, there is no gas, electricity or water.

“In some villages and towns that Russia occupied in 2022 and where there have been no hostilities for three years, people still live without electricity, in ruins. They get water from wells, sometimes they are brought “humanitarian aid”. But there is nothing there – there is an absolute apocalypse there,” the journalist explains.

The situation in the cities further from the front line is a little better. But the water problem is present throughout the Donetsk region, because in 2022 the Russians destroyed the water supply system that supplied Donetsk and the agglomeration from Seversky Donetsk.

So now, despite a significant decrease in the population, there is still not enough water. Residents of Donetsk, Makiyevka, Yenakiyevo are massively complaining about the lack of water, posting video appeals on social networks, but there is no reaction.

“There is a feeling that Russia is completely ignoring the problems of these people and does not plan to solve the situation,” Kazansky concludes.

Why Russia is raising tariffs: an economic explanation

“In fact, the logic in this increase is the same – Russia is simply running out of money,” says Denis Kazansky. “Now the Russians have to collect it from their own population or from the population of the occupied territories to make up for the budget deficit. And now the population of the occupied territories is actually paying for the war against their own country, their own occupation.”

According to the journalist, a significant increase in prices is also taking place on the territory of Russia, “because Putin no longer has the money to throw at his population like a bone and buy their loyalty, as before.”

Tariffs are not formed according to market rules, but in a way that artificially maintains the profitability of companies operating in the occupied territories, believes the head of the Lugansk OVA, Oleksiy Kharchenko.  

“First of all, we must remember that no one will feed the occupied territories, it is very expensive for Russia to support them. Therefore, I think that in the near future tariffs and everything else will “catch up” with the level of Russian prices, and maybe even set higher tariffs, because now, for example, the prices of products in the occupied territories are much higher in some places,” Kharchenko notes.

“Finally, the economy has caught up with Russia,” says Petro Andryushchenko. “Previously, Russian gas was not as cheap as its selling price for the population was. The difference – in fact, unprofitability or unprofitability – was compensated by the excess profit from gas exports to Europe. Now companies are operating at a loss. So, the economy is starting to function properly: people are paying for real consumption.”

Volodymyr Omelchenko, director of energy programs at the Razumkov Center, explains: Gazprom actually cannot do without state support, because it has lost its most liquid market – the European one. Gas is now supplied only to a few Balkan countries, Hungary and Slovakia.

“In addition, since January 1 of this year, gas transit through the territory of Ukraine has ceased, which means additional losses for Russia - about six billion dollars a year. The company still has nothing to replace these liquid markets, since China has abandoned the Nord Stream 2 project. To compensate for Gazprom’s significant losses, huge sums of money are being allocated from the Russian state budget. But since the Russian budget is losing its main means of financing the war, the resources to cover the losses are disappearing. The only way out is to increase prices, including for the population and the economy,” the expert explains. According to Omelchenko, the suspension of Russian gas transit through Ukraine has further worsened Gazprom’s financial situation. This year, the company has laid off about 1,500 employees from the central office. Staff reductions are also taking place in regional departments throughout Russia, and some wells are being preserved.

Serious problems are also observed in the power sector in Russia. And the price of utilities directly depends on energy prices, since 70 percent of the country's electricity is produced using gas, and the price of gas also determines the price of electricity, Omelchenko adds.

"An increase in the domestic price of gas automatically entails an increase in the price of electricity. And this, in turn, causes a chain reaction of price increases: for food products, where

electricity is an important component, for building materials, industrial products, etc.," says the director of energy programs at the Razumkov Center.

According to him, the logistics of supplying Russian oil to China or India is much more complex and expensive than transporting it through oil pipelines to Europe, which is why the price of Urals oil has fallen. As a result, the oil industry is operating at the limit of profitability.

Problems are noted at Rosneft and Surgutneftegaz. In addition, attacks by Ukrainian drones have significantly damaged or destroyed a number of oil refining facilities. All this leads to a significant increase in the price of petroleum products within Russia, which in turn affects the price of industrial products and food.

The situation in the occupied territories is even worse than in Russia itself, Omelchenko notes, because local problems are added to the general Russian problems.

"Local administrations, which are formed, among other things, from people who come from Russia, are engaged in the theft of resources. Men are forcibly mobilized into the Russian army, which is why there is a serious shortage of labor: there is no one, and often nothing, to repair equipment, pipelines, transformers. Russia pays the least attention to the occupied territories. In general, the situation there remains difficult and is expected to only worsen," the expert explains.