Business news from Ukraine


Ukraine in the memorandum to the International Monetary Fund (IMF) under the new Stand-By Arrangement has undertook by the end of August to review and approve all heating tariffs, linking them to the cost of gas and associated costs, including capital investments.
“We have eliminated the cap on household heating tariffs by revoking cabinet resolution No. 560 of June 26, 2019. We will ensure that, by the end of August 2020, all heating tariffs under the jurisdiction of both the NEURC (the National Energy and Utilities Regulatory Commission of Ukraine) and local authorities are reviewed and officially enacted to fully reflect gas and non-gas costs (including capex),” the document says.
“Starting with the 2020/2021 heating season, heating tariffs will be reviewed and set at least once per year before the start of the heating season to ensure that changes in gas and non-gas costs (including capex) are adequately reflected in heating tariffs. To that end, prior to the start of the 2020/2021 heating season, we will rescind cabinet resolution No. 1082 of December 24, 2019, which allows for the asymmetric changes in heating bills without the need to address heating tariffs when the price of input gas changes. In order to mitigate the risk of future arrears we will develop in consultation with the World Bank mechanisms to provide buffers for district heating companies to deal with the volatility in the wholesale gas price,” according to the report.
“By the end of June we will legislate an October 1, 2020 deadline for all new utility service contracts incorporating the revised heating tariffs to be concluded,” it says.

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Tariffs for sea freight and air cargo have increased, while the cost of international road haulage has stabilized, but there may be queues at the key automobile checkpoints, Viktor Shevchenko, the co-owner of Zammler logistics group, has told Interfax-Ukraine. “Compared to the beginning of the year, now due to coronavirus [COVID-19] epidemic spread, tariffs for sea freight have risen by an average of $150-200 per TEU. A jump in prices occurred in March, as China began to recover production activity, demand for cargo departures increased, there was a shortage of places, respectively, the cost increased,” he said.
According to Shevchenko, due to the following sanitary and hygienic safety rules, procedures for processing goods in ports are delayed.
According to him, in connection with the epidemic, there is no air traffic now, thus, cargo carried earlier by passenger flights is delivered by cargo planes.
“Accordingly, there are not enough places for cargo departures. Airlines that continue to fly to Ukraine with cargo planes have increased tariffs. Now a place for departure should be booked a few days before departure, tariffs are provided in the mode for today,” the co-owner of Zammler said.
Shevchenko also said that over the past week, the situation with international trucking has changed dramatically.
“If last week tariffs on imported freight were 40-50% higher than pre-quarantined, to date the price situation has stabilized. Last week there was a shortage of transport in Europe due to high demand (recipients tried to replenish stocks of goods). But now we see a shortage of goods, namely enterprises are suspending operations, the volume of exports and imports is declining,” he said.
According to Zammler’s forecasts, the queues at key automobile checkpoints will soon resume again due to the closure of the Hrebenne-Rava-Ruska checkpoint.
Shevchenko said that the cost of freight traffic in the territory of Ukraine due to the epidemic has not yet changed.
“There is a slight decline in volumes, to 10%. It is difficult to predict the further value, since it directly depends on the stability of the exchange rate,” he said.
Zammler Group is a Ukrainian group of logistics companies with offices in Europe and Asia. The group companies provide all types of logistics services for the B2B segment.

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President of Ukraine Volodymyr Zelensky has held a meeting at which he set the task for heating tariffs to be reduced in Ukrainians’ utility bills in December, since gas prices for the population had previously been reduced. “Gas prices have decreased, but tariffs have not. Why so? We are looking for ways to reduce the price and make Ukrainians receive lower heating bills in December,” he said on his Facebook page, where a video was also posted about the meeting attended by Prime Minister Oleksiy Honcharuk, Energy Minister Oleksiy Orzhel, Head of the Presidential Office Andriy Bohdan and his deputy Yulia Kovaliv.
At the meeting, it was said that after lowering gas prices, Ukrainians should receive lower tariffs, but legislatively, it is impossible today to change heating tariffs until May 2020.
“We’ve coped with the gas price. In order for the heat tariff to go down this winter, we have a very short bill, which can be introduced by the president as urgent, and the adoption of this law will lead to the fact that our tariff for the population will decrease. This winter we have already protected consumers from tariff growth, because it has traditionally grown. It will not grow anymore,” Honcharuk said.
Kovaliv, in turn, noted that the National Commission for Energy, Housing and Utilities Services Regulation (NCER) is authorized to change the tariffs and this issue should also be discussed with the regulator.

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Kyivstar mobile operator starting from October 1, 2019 launches four tariff plans for new customers within the Kyivstar All Together line.
According to the company’s press service, all new tariff plans include home Internet with a speed of 100 Mbps, unlimited calls within the Kyivstar network and unlimited non-tariff Internet for using 42 applications. Among them are Google Maps, Snapchat, Pinterest, Google Play Music, SoundCloud, Spotify, Netflix, as well as the online games Minecraft, World of Tanks BLITZ, the Steam service, etc.
The new Kyivstar All Together Basic tariff, in particular, provides subscribers with 120 minutes to the numbers of other telecom operators, as well as 12GB of mobile Internet.
Within the Kyivstar All Together Favorable tariff, subscribers will have unlimited mobile Internet and 180 minutes for calls to other mobile operators and abroad, as well as 180 SMS for sending within Ukraine.
The Kyivstar All Together Generous tariff includes unlimited mobile Internet and 300 minutes for calls to other mobile numbers in Ukraine and abroad.
The Kyivstar All Together Gaming tariff is designed for fans of the World of Tanks online game. It has additional gaming advantages. In addition, this package includes 300 minutes for calls to other mobile operators in Ukraine and abroad, as well as 300 SMS within Ukraine.

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President of Ukraine Volodymyr Zelensky has sent to the Verkhovna Rada of Ukraine a bill amending some laws of Ukraine on cutting electricity tariffs.
The document was registered in the parliament on June 26. The text of the bill has not been made public.
As reported, representative of the head of state in the Ukrainian government Andriy Gerus said that Ukrainian President Volodymyr Zelensky initiated the legislative change of the Rotterdam+ formula by the Rotterdam- formula in order to reduce electricity tariffs. He said that according to the document, the cost of shipping coal from Rotterdam to Ukraine should be removed from the formula. In addition, it is proposed that discounts be introduced if the quality of coal is worse. The bill also provides for a delay in the introduction of the electricity market for one year.

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Ukrainian President Volodymyr Zelensky is looking for ways to cut the energy tariffs for households, but it should be done in a way so not to devaluate the hryvnia, arouse additional inflation or economic crisis, representative of the head of state in the government Andriy Gerus has written on his Facebook page. According to him, work in this direction is underway. The president has already held two meetings devoted to this issue, and to fulfill the task, an efficient parliament and new laws are needed.
Now, Zelensky’s team is developing a comprehensive plan to reduce housing and utility tariffs for households, where possible, without negative side effects, the presidential envoy to the Cabinet of Ministers said.
One of the necessary conditions for this plan is the demonopolization of energy markets, Gerus said, expressing the hope that the Antimonopoly Committee of Ukraine will eventually begin to work fully.
According to him, it is also necessary to achieve growth in gas production (for which it is necessary to attract foreign investors to this area). At the same time, Gerus added that the stoppage of gas imports, according to the calculations of the Zelensky’s team, will reduce its price for households by 20-30%.
The president’s team also understands that some categories of the population are unfairly deprived of subsidies, the rules should be reviewed. To find funds in the budget for their payment, some oligarchs will have to be deprived of tax breaks and preferences, Gerus said.
He also said about unofficial information in the press about the increase in gas tariffs for households by 10-15% and electricity tariffs – by 150%.
“Our opinion was: these steps cannot be done without trust and understanding of society. Before this, there is a need to demonstrate to Ukrainians firm and fair actions of regulators regarding energy monopolies, and also show that punishment is incurred for stealing tariff funds. As I understand, our opinion has been taken into account,” Gerus said.

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