Cabinet To Approve Insurance Gas Price Of UAH 7,000 Per 1,000 Cubic Meters For Households From January 2020 – Orzhel

The Cabinet of Ministers intends to approve an insurance gas price of about UAH 7,000 per thousand cubic meters (including VAT and excluding transmission costs) for households from January 1, 2020.

Minister of Energy and Environmental Protection Oleksii Orzhel announced this during an interview on Channel 24, Ukrainian News Agency reports.

“There is an important factor that the Cabinet of Ministers is working on. People will be offered an insurance gas price from January 1, and they will be able to choose this price until the end of the heating season. It will be lower than the gas price in the first quarter of 2019. Moreover, it will be fixed until the end of the heating season," he said.

The minister also suggested that the price of gas would rise again in December.

According to Orzhel, any customer will have the opportunity to reject the insurance gas price.

He explained that rejection of the insurance gas price could be positive or negative for a customer.

“The consumer wins if gas transit is discontinued and there are some fluctuations on the gas market. If, for example, we sign a transit contract, this will be a significant market stabilization factor and the fact that we have significant volumes of gas in our underground gas storage facilities in Europe and the fact that gas transit will not stop will likely play a role in lowering the price of gas, then those consumers who are insured and are on such agreements will not benefit from this situation," Orzhel said.

The minister also said that the insurance price is currently estimated at about UAH 7,000 per thousand cubic meters (including VAT and excluding transmission costs).

As Ukrainian News Agency earlier reported, Orzhel previously stated that the price of natural gas for households would be below UAH 8,550 per thousand cubic meters in the first quarter of 2020.

The Naftogaz of Ukraine national energy company raised the price of natural gas for households by UAH 622.24 or 14.6% to UAH 4,899 (excluding VAT and transmission costs) under the terms of its public service obligations (PSO) in November.

Ukraine stopped pumping natural gas into underground storage facilities and began pumping gas out of them on November 2.

Gas reserves in Ukraine’s underground gas storage facilities totaled 21.785 billion cubic meters as of November 2. This means that gas reserves in underground gas storage facilities have increased by 13.040 billion cubic meters or 2.5-fold since the beginning of the gas-pumping season, which began on April 5.

The Naftogaz of Ukraine national energy company’s Board Chairman Andrii Kobolev has stated that gas reserves in underground gas storage facilities reached the maximum volume in nine years before the beginning of the 2019/2020 heating season.