Naftogaz May Become Monopolist In Market Of Gas Supplies To Population In 2 Months - Antimonopoly Committee

The Antimonopoly Committee of Ukraine (AMCU) declares that the Naftogaz of Ukraine Gas Supply Company LLC will have structural signs of a monopoly (dominant) position in the market for gas supplies to the population in 2 months, if during this period a significant number of consumers who receive gas from the company as part of the supply of "last resort", will not choose another supplier.

This is stated in the response of the Antimonopoly Committee to the request of Ukrainian News Agency.

It notes that on July 22, 2020, the Cabinet of Ministers determined the Naftogaz of Ukraine Gas Supply Company LLC as the supplier of "last resort" for a period of 3 years as the winner of the competition.

At the same time, the "supplier of last resort" supplies natural gas to the consumer within a period that cannot exceed 60 days and lasts until the end of the calendar month following the month in which the actual supply of natural gas to the consumer by the "supplier of last resort" begins.

At the same time, consumers who have lost their suppliers have 60 calendar days to choose another supplier or remain a gas consumer of Naftogaz of Ukraine.

"The monopoly (dominant) position is considered to be the position of a business entity whose share in the product market exceeds 35%, unless it proves that it is experiencing significant competition. That is, if a significant number of natural gas consumers do not choose another natural gas supplier in 2 months, the company may indeed have structural signs of a monopoly (dominant) position in the natural gas supply market," the committee's response reads.

At the same time, according to the committee’s response, from 2020 to the present, the gas supply company Naftogaz of Ukraine has not applied to the committee for permission to concentrate 93% of the gas supply market to household consumers.

"In connection with the abovementioned, the Committee did not provide Naftogaz of Ukraine with the appropriate permission for concentration, no decisions were made to grant concentration permission to Naftogaz of Ukraine during this period," the AMCU said in a response.

The AMCU notes that the presence of a monopoly (dominant) position in the market, which is not in a state of natural monopoly, is recognized only by the decision (order) of the committee based on the results of consideration of cases of violation of legislation on the protection of economic competition or relevant market research.

As Ukrainian News Agency earlier reported, according to the calculations of the Ukrainian News Agency, at the beginning of June, the Naftogaz of Ukraine Gas Supply Company LLC concentrated 96% of the gas supply market to household consumers.

At the same time, the Naftogaz of Ukraine Gas Supply Company LLC, which acts as a supplier of "last resort", expects the transfer of 8.8 million household consumers under the supplier of "last resort" to standard contracts for the supply of gas with the company at a price of UAH 7.96 per cubic meter (with VAT).