18.05.2021

New tariffs will change the life of Ukrainians

In Ukraine, the gas market has actually been divided into two parts: industrial rules live according to some rules, and domestic consumers according to other rules. A business can choose who to buy gas from, compare prices from different suppliers. At the same time, ordinary Ukrainians actually buy blue fuel from the state-owned Naftogaz at the rate established by the government.

And while for industrial consumers on the open market gas costs 9-10 UAH per cubic meter, ordinary Ukrainians buy the same blue fuel at 6.9 UAH. But this situation will not last long.

The adopted law “On the gas market” says: the government, as an exception to protect consumers, may impose special obligations on suppliers, for example, regarding tariffs. And they “awarded” Naftogaz with such obligations. However, after the gas market fully operates, the tariff for blue fuel will be formed on the exchange.

Instead of one Naftogaz there will be dozens of different companies, including foreign ones. They will calculate their rates and offer them to the consumer. Moreover, the lower the price, the more buyers. This, in theory, should in the future restrain tariff growth.

“There is no other way besides market liberalization. If gas for industry costs 10 thousand UAH per thousand cubic meters, and for the population – 7 thousand UAH, someone should pay for this difference. We still have the last segment to be liberalized – the population and the TCE. Competition is the only thing that can keep prices low, ”explains Maxim Nefedov, Deputy Minister of Economic Development and Trade.

To launch the market, three important conditions must be met: to divide the assets of Naftogaz (the operator of the gas transmission system Ukrtransgaz is the “daughter” of a monopolist, and this creates a conflict of interest), monetize subsidies and start daily gas balancing according to the European model. The state should give “discounts on communal services” with “living” money to the end consumer. The family will be able to pay for the communal apartment on their own, paying full tariffs. In this case, gas suppliers will be interested in working with the public. Now compensation for subsidies comes with delays, and not every business is ready for such a situation.

Balancing – eliminating the difference between incoming and withdrawn gas in the system. At the moment in Ukraine there is a monthly balancing. Ukrtransgaz buys gas through the Prozorro system to maintain balance. But the size of these lots reaches UAH 1.8 billion; only Naftogaz can fulfill such volumes. If we switch to daily balancing, the size of lots will decrease, and dozens of different suppliers will be able to participate in them.

“When a crisis occurred in 2008, the European market began to switch to short-term contracts: internally per diem and a day in advance. Buyers became unprofitable to issue long-term contracts. Switching to exchanges has led to a significant reduction in prices. When volumes are small, competition will increase. Now, at Prozorro, Ukrtransgaz buys gas for balancing in such lots that no one except Naftogaz can sell it gas, ”says Inna Shcherbina, member of the board of the Ukrainian Energy Exchange.

What will happen to the prices

Foreign companies should also participate in the gas market, as is now happening in the industrial segment. IMF experts, like the Ukrainian Naftogaz, believe: as long as Ukraine imports part of the blue fuel, prices should be based on import parity . The memorandum signed with the IMF refers to the so-called “hub +” formula. That is, transportation costs, taxes and profits are added to prices at the German hub. The resulting figure is the tariff at which Ukrainians must pay for blue fuel. At the same time, Naftogaz voiced another version of the formula – “hub-“. That is, instead of adding transportation costs (which actually is not), subtract these costs from import prices.

And while the government is coordinating with the IMF the final version of the updated formula (by the way, the cost of gas with VAT should reach UAH 11.47 in October, according to import parity), the National Commission for Energy and Utilities (NKREKU) together with the government is trying to launch the gas market . For example, now on the Ukrainian stock exchange a cubic meter of gas costs 9 UAH, last winter prices fell to 8.6 UAH / cubic meter. This is more than current tariffs, but less than import parity.

“The exchange allows you to make a forecast. Suppliers predict consumption, predict what the price may be. Based on this, they are already calculating their rates. And the population is already choosing among suppliers those whose conditions attract them more. Usually they sign contracts for a quarter, half a year with certain fixed tariffs, ”Shcherbina explains. The expert is sure: if the market fully earns, then prices will begin to decline.

Naftogaz v.

The daily gas balancing in Ukraine should start working on August 1 of this year. The code of the gas transmission system, which regulates the new rules, has already been adopted by the NKREKU. However, Naftogaz, together with its subsidiary Ukrtransgaz, is opposed to innovations. The main argument – the Code allegedly legalizes the theft of blue fuel.

So, unauthorized gas extraction (in other words, theft) by means of unauthorized connection or damage to meters, will be taken into account in balancing. “That is, anyone can illegally deprive Ukrtransgaz of the right to own a technological resource of natural gas and this will not be considered an offense, since according to paragraph 2 of paragraph 7 of chapter 6 of section HII of the new edition of the GTS Code, this is a balancing service,” the official position says Ukrtransgaz.

Also, Naftogaz informally called other “comments” to the Code – the NKREKU did not approve the methodology for forecasting volumes, which means it is not known whether the figures will be “taken from the ceiling”. In addition, the code does not oblige to publish daily information on the gas level in the system, and neutrality fees will be charged every quarter, and not every month, as provided for in European practice.

NKREKU is confident that Ukrtransgaz is simply slowing down the launch of daily balancing in its own interests. The head of the regulator, Oksana Krivenko, said that the company will conduct an unscheduled audit the other day: they will figure out how Ukrtransgaz spent the money allocated to prepare for the new principle of balancing. At the same time, they refused to transfer the new methodology to the NKREKU.

Officially, the government, Naftogaz, and Ukrtransgaz support the idea of ​​daily balancing.

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