18.05.2021

The new tariffs will change the lives of Ukrainians

In Ukraine, the gas market is actually divided into two parts: one of the rules we live by industrial and other domestic customers. A business can choose who to buy gas, to compare the prices of different suppliers. At the same time, ordinary Ukrainians actually buy the blue fuel from state-owned “Naftogaz” in accordance with the government rate.

And while for industrial consumers on the open market gas is 9-10 UAH per cubic meter, ordinary Ukrainians are buying the same gas at 6,9 UAH. But to continue, this situation will not last long.

In the adopted law “On gas market” said: the government as an exception to protect consumers may impose special obligations on suppliers, for example regarding tariffs. And such obligations, they “awarded” to “Naftogaz”. However, once the gas market is fully operational, the tariff for natural gas will be formed on the stock exchange.

Instead of one of “Naftogaz” will be dozens of different companies, including foreign ones. They calculate their rates and offer them to consumers. The lower the price the more buyers. This, in theory, it should in the future to restrain the growth of tariffs.

“Other way, except for the liberalization of the market, no. If the gas industry is worth 10 thousand UAH per thousand cubic meters, and for the population – 7 thousand UAH, someone has to pay for the difference. Now we have the last segment that needs to liberalize population and CTV. Competition is the only thing that can keep prices low,” explains Deputy Minister of economic development and trade Maksim Nefedov.

To run the market need to fulfil three important conditions: to divide the assets of “Naftogaz” (the operator of the gas transportation system “Ukrtransgaz” – subsidiary of the monopolist, and this creates a conflict of interest), to monetize the subsidy and run by the European model of daily balancing gas. “Discount on a communal flat” the government should give “live” money and the end user. The family will be able to pay for communal self-paying the full tariffs. In this case, the gas suppliers will be interested to work with the population. Now compensate for the subsidies come with delays, and this situation as not everyone is ready business.

The balancing act – the elimination of the difference between the received and selected gas in the system. At the moment Ukraine has a monthly balance. “Ukrtransgaz”, to keep the balance buys gas through Prozorro. But the size of these lots comes to 1.8 billion UAH, the volume of such can perform only “Naftogaz”. If go to daily balancing, the lot size will decrease, and they will be able to participate in dozens of different suppliers.

“When in 2008 was the crisis, the European market began to get short-term contracts: internally daily and day ahead. Buyers became unprofitable to issue long-term contracts. The transition to exchanges led to a significant reduction in prices. When volumes are small, competition will increase. Now Prozorro the company buys gas for balancing these lots that no one but “Naftogaz” can not sell him the gas,” says a member of the Board of the Ukrainian energy exchange Inna Shcherbina.

What will happen to prices

In the gas market must be extended to foreign companies as is now happening in the industrial segment. The IMF experts, as well as Ukrainian “Naftogaz”, I think: as long as Ukraine imports of the blue fuel, the prices should be based on import parity. Signed with the IMF the Memorandum we are talking about the so-called formula of “hub+”. That is, the prices in the German hub add the cost of transportation, taxes and profit. The resulting figure is the rate that should pay for natural gas the Ukrainians. At the same time “Naftogaz” voiced another version of the formula – “the hub “. That is, instead of having to add the cost of transportation (which actually is not), subtract these costs from import prices.

And while the government negotiates with the IMF, the final version of the updated formula (by the way, the price of gas from VAT should reach in October of 11.47 UAH, according to the import parity), the national Commission in the areas of energy and utilities (NKREKU), together with the government tries to run the gas market. For example, now on the Ukrainian stock exchange cubic meter of gas worth UAH 9, last winter prices fell to 8.6 UAH/cu Is more than current rates but less than import parity.

“The exchange can make a prediction. Suppliers predict consumption, predict what may be the price. On this basis they have calculated their rates. And the population already chooses among the suppliers of those whose conditions are more attracted to them. Usually sign contracts for one quarter, six months with certain fixed rates,” explains nick. The expert is sure: if the market is fully operational, the prices will begin to decline.

“Naftogaz of Ukraine” against

Daily balance of gas in Ukraine should start functioning from 1 August this year. Code transmission system, which regulates the new rules, already adopted by the national Commission. However, against innovation is “Naftogaz” together with its subsidiary company “Ukrtransgaz”. The main argument is that the Code supposedly legalizes the theft of natural gas.

So, siphoning gas (in other words, theft) using unauthorized connection or damage counters will be taken into account in the balancing. “That is, anyone can illegally to deprive the company of the right of ownership of the technological resources of natural gas and it will not be considered an offence, since according to paragraph 2 of article 7 of Chapter 6 of section XII of the new edition of the Code GTS is a service of balance,” reads the official position of “Ukrtransgaz”.

Also in the “Naftogaz” unofficially named other “comments” to the Code – NKREKU not approved the methodology for forecasting volumes and, therefore, it is unknown whether the numbers “taken from the ceiling”. In addition, the code does not oblige the daily to publish the information about the level of gas in the system, and the fee for neutrality will be collected every quarter instead of every month as stipulated in European practice.

In NKREKU sure that the company simply slows down the launch of a daily balancing act in their own interests. The head of the Governor Oksana Krivenko said that the company will conduct an unscheduled inspection to understand how the company spent the money allocated for preparations for the new principle balance. At the same time to transfer a new technique in NKREKU refused.

Officially, however, the idea of the daily balancing is supported by the government and “Naftogaz” and “Ukrtransgaz”.

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