NJSC Naftogaz Ukrainy has reduced the price of gas for households and heating companies by 13% in December compared with the price in November, to UAH 4,277 per 1,000 cubic meters (excluding VAT, transportation costs and gas sellers’ margins), the company said in a press release.
“Despite the fact that according to the results of exchange trading, the market price of gas in the Ukrainian market did not decrease over the past month, the regulated price in December 2019 decreased in accordance with the declared value of gas cleared in November,” Naftogaz noted.
The company noted that this price level is not market and is determined according to the formula established by the Cabinet of Ministers in its resolution No. 293. In particular, according to the document, the population and heating companies purchase gas at the minimum of four prevailing in the market value: the average import price according to the Ministry of Economic Development and Trade, the price of Naftogaz Ukrainy for industry, the average weighted price at the auctions on the Ukrainian Energy Exchange, PSO under resolution No. 867. This mechanism of social price formation is valid until the end of 2019. From January 1, 2020, in accordance with agreements with the International Monetary Fund, Ukraine will switch to market pricing for household consumers.
It is possible to lower electricity prices for non-domestic consumers by 20%, presidential representative in the government Andriy Gerus said.
“It is necessary to consider three solutions that all together are to significantly reduce the price of electricity for non-domestic consumers,” he said at a briefing following the results of the conference with President of Ukraine Volodymyr Zelensky over functioning of a new model of electricity market and preparation for autumn-winter period in Kyiv on Monday.
According to him, it is necessary to review government’s resolution on charging National Nuclear Energy Generating Company Energoatom and PrJSC Ukrhydroenergo with the special duties, most of which to be commissioned to the latter.
“It will allow decreasing tariff of Ukrhydroenergo over three times. Now it is 32 kopecks/kWh, when it is expected to be 8-9 kopecks/kWh,” Gerus said.
Besides, he said that it was worth to raise a maximum night price by about 10%, and to lower a maximum day price by 15-20%.
“If all three measures are taken, [electricity price] for ending consumers, large, middle, small, budget establishments and organizations, will be almost 20% less,” the presidential representative said.
NJSC Naftogaz Ukrainy in July will cut the price of natural gas for the needs of households by 8% compared with the price in June, to UAH 5,803 per 1,000 cubic meters (VAT and transportation and distribution costs not included), Chairman of Naftogaz Executive Board Andriy Kobolev has written on his Facebook page.
“Gas on the international market is becoming cheaper again. Thanks to this, Naftogaz reduces gas prices for industrial consumers by almost 8% in June. According to the government’s decision, the price of Naftogaz for commercial consumers forms the price of gas for households that is valid next month,” he wrote.
As reported, Cabinet of Ministers resolution No. 867 dated October 19, 2018 extended the period of validity of public service obligations (PSO) for Naftogaz to sell natural gas for the needs of the households, producers of heat energy and religious organizations until May 1, 2020.
The situation on the European market since spring 2019 has led to a decrease in the market price of gas below the government-set regulatory level for households.
The government made amendments, according to which, under PSO, the prices of gas for households and heat suppliers is calculated as the average price of gas supplied by Naftogaz to industrial consumers that was in effect in the month preceding the month of delivery.