Naftogaz could be forced to freeze gas price for households.

Photo from UNIAN

Photo from UNIAN

Acting Energy Minister Yuriy Vitrenko says the Cabinet at its meeting on Wednesday instructed the economy ministry to submit a number of resolutions that would oblige Naftogaz of Ukraine to sell gas to households and municipal heating generators at a fixed price – from April 2021 to May 2022.

With a declared aim of "contributing to the gas market development and ensuring deliveries to households, including vulnerable groups, the Cabinet is set to oblige Ukrgazvydobuvannya gas producer, which is part of Naftogaz Group, to sell at a fixed price – before the end of March 2021 – to gas suppliers and heating generation companies volumes of natural gas that would cover demand from April 1, 2021, to April 30, 2022, that is, for the entire year.

It is also envisaged that from April 2021 Ukrgasvydobuvannya shall be selling 100% of commercial gas to all gas market players on terms no worse than those set for Naftogaz Group.

Read also Rada expands powers of acting ministers Vitrenko added that from April 2021, Naftogaz Trading GSC would act as a market maker in the natural gas market as regards trading in medium-term standardized products (for a period of up to two years).

Background

On January 1, 2021, a new price of natural gas was introduced in Ukraine; it was offered by gas suppliers as part of launching a competitive gas market.

Gas suppliers' prices for households in Ukraine in January were set between UAH 6.99 (US$0.25) and UAH 10.8 (almost US$0.39) per cubic meter, while the minimum rate was 11% up and the maximum one was 20.5% up on the December quotation.

On January 1, 2021, new tariffs for natural gas transportation were also introduced in Ukraine.

The National Energy and Utilities Regulatory Commission of Ukraine increased tariffs for 43 gas distribution companies' services by an average of 1.6 times as of January 2021.

Since the beginning of January 2021, rallies in protest against the increase in utility rates have taken place in a number of regions across Ukraine.

Responding to the mass protests, President Volodymyr Zelensky instructed the government to urgently resolve the issue of gas tariffs for the population.

On January 13, 2021, the Cabinet said it would propose setting a fixed price of natural gas for households at UAH 6.99 per cubic meter.

On January 18, 2021, the government fixed a price of natural gas at UAH 6.99 per cubic meter for households in Ukraine as of February until the end of the heating season.

In addition, Ukrainian Prime Minister Denys Shmyhal said that the NEURC should soon make a decision on setting the cap on the gas distribution tariff at UAH 1.79 (US$0.06) per cubic meter.

On January 18, 2021, the Cabinet set from February the gas price cap for households at UAH 6.99 per cubic meter.

On February 26, 2021, it became known that Naftogaz had cut gas prices for municipal heating generation companies.

Reporting by UNIAN

Unian

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