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Economy 2019-09-15T04:20:19+03:00
Ukrainian news
Cabinet Allows Naftogaz To Sell Gas For Purposes Of Households At Price Lower Than UAH 8,550 Per 1,000 Cubic M

Cabinet Allows Naftogaz To Sell Gas For Purposes Of Households At Price Lower Than UAH 8,550 Per 1,000 Cubic Meters Starting April 1, 2019

The Cabinet of Ministers of Ukraine has allowed the Naftogaz of Ukraine national joint stock company to sell gas for purposes of households at a price lower than UAH 8,550 per 1,000 cubic meters starting April 1, 2019.

The Cabinet of Ministers adopted the decision at its sitting on Wednesday, Ukrainian News Agency reports.

"Today we have adopted a decision to entitle Naftogaz to set prices starting April 1 lower than UAH 8.55 per cubic meter and no higher in any case," Prime Minister of Ukraine Volodymyr Groysman said.

The decision follows a letter of Naftogaz in which the company informed the government that it had purchased gas from Slovakia at UAH 5,981 per 1,000 cubic meters as the gas prices are falling in Europe.

As Ukrainian News Agency earlier reported, the Naftogaz of Ukraine national energy company has proposed that the Cabinet of Ministers end Public Service Obligations (PSO) to supply natural gas to households and heating utilities and open the household gas market to competition among suppliers.

Naftogaz of Ukraine’s Board Chairman Andrii Kobolev said Ukrainian gas traders could offer gas at a price that is lower than the current price that is established for households in the PSO resolution from April because the prices on the European market had fallen. He noted that the price amounts to about UAH 8,380 per thousand cubic meters, taking account of value-added tax and the costs of transportation and delivery, while households pay UAH 8,550 per thousand cubic meters.

The price of natural gas for households increased by 23% to UAH 8,548.92 per thousand cubic meters (including VAT and other fees) on November 1, 2018, compared with the previous price of UAH 6,958 per thousand cubic meters.

At the same time, the government changed the formula for determining the price of natural gas for households and heating utilities.

The main benchmark will not be the average gas price at a German hub but the arithmetic average price of gas that Naftogaz of Ukraine sets for industrial consumers on condition of prepayment before the delivery period (UAH 8,981 per thousand cubic meters from July 1, 2018, to September 30, 2018).

A coefficient of 0.6943 applies to this price from November 1, 2018.

Thus, the final price of gas for households is UAH 8,548.92 per thousand cubic meters and UAH 8,361.85 per thousand cubic meters for heating utilities (taking account of cost of gas delivery and distribution and VAT).

The Cabinet of Ministers also extended the PSO of Naftogaz of Ukraine and regional gas supply companies to supply natural gas to households and heating utilities.


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