Economy 2023-07-15T05:57:03+03:00
Ukrainian news
Rise In Gas Prices In Europe Will Allow Naftogaz To Increase Number Of Its Household Consumers - Member Of Exp

Rise In Gas Prices In Europe Will Allow Naftogaz To Increase Number Of Its Household Consumers - Member Of Expert Council Of Energy Ministry Riabtsev

gas, Naftogaz, Naftogaz of Ukraine, Europe, Energy Ministry, gas price, Dutch gas hub, Dutch gas hub TTF, Hennadii Riabtsev, expert, Gas price in Europe

Hennadii Riabtsev, a member of the expert council of the Ministry of Energy, states that the rise in gas prices in Europe will allow the Naftogaz of Ukraine national joint-stock company to increase the number of its household consumers.

He announced this to Ukrainian News Agency.

“There is a misconception in Ukraine that quotations on European gas hubs reflect the real relationship between supply and demand in Europe. Indeed, in accordance with the third energy package, one of the goals of the changes that should take place in the European gas market is to abandon the long-term and medium-term contracts and pricing through networks of 10-15 electronic trading platforms," he said.

Riabtsev noted that now quotations on gas hubs reflect only the rate of inflow and outflow of speculative capital.

At the same time, he added that such a situation on the European gas market is beneficial to the Naftogaz of Ukraine national joint-stock company.

“In Ukraine, all these changes are generally not particularly important and will not have much impact. The only exception is companies that provided a choice for the consumer between Naftogaz and someone else. It has now become almost impossible for these companies to exist, since these companies do not have their own resource, and the resource of UkrGasVydobuvannya is being sold at a price that is significantly different from what it was a few months ago," Riabtsev said.

According to him, this is due to the fact that domestic prices in Ukraine are tied to quotations at the Dutch gas hub TTF.

“That is, there is no internal indicator that would allow setting the price based on the ratio of supply and demand. Therefore, no matter how much gas is produced by Ukraine, no matter how much it is stored in our UGS facilities, the price within the country will still be determined based on speculative quotations on the Dutch hub TTF," Riabtsev emphasized.

He noted that this can be dealt with by creating a liquid trading platform in Ukraine and an internal indicator that will take into account the price of domestically produced gas or the presence of reserves in UGS facilities.

“But this is not profitable for the Naftogaz group, which needs to monopolize the retail segment of the market, and I think this link will provide Naftogaz with a very rapid increase in household consumers in the near future. This will happen due to the fact that small companies that do not have access to the resource of UkrGasVydobuvannya are forced to buy gas at a price that is higher than the price of UkrGasVydobuvannya," Riabtsev summed up.

As Ukrainian News Agency earlier reported, on July 6, the cost of natural gas at the Dutch TTF gas hub under a day-ahead contract reached USD 474.2 per 1,000 cubic meters.