ABSTRACT
This chapter analyzes the reform process in the energy sector and discusses some policy conclusions. It describes reforms made to date or envisaged in the energy sectors. The chapter considers the supply side of the energy issue, with an emphasis on the burden of financing. It deals with the demand for energy, the potential of energy saving, and the incentives to do so and basic proposals for a horizontal structural policy beyond sectoral programs. Reforms of the energy sector were significant in the first stage of transition, when bold decisions were made, including the full-scale liberalization of the power sector, as well as the restructuring and modernization of the coal sector. The challenge facing the Ukrainian gas industry is to further deregulate the sector and to set up an independent regulator. The Ukrainian oil sector was formally liberalized early in 1994, since which time it has experienced profound changes.
