Page 10 - FSUOGM Week 05 2021

FSUOGM POLICY FSUOGM

Naftogaz slashes gas prices

on government order

UKRAINE UKRAINE’S national gas company Naftogaz Union.
has lowered the price of gas for households in The company said that for customers who
The government is February to UAH6.89 per cubic metre (includ- signed up for the annual tariff last year, the cost
working to ease the ing VAT but excluding transportation costs) of gas will remain at the levels of UAH4.73,
burden on Ukrainian from UAH7.22 per cubic metre in January, Naf- UAH5.24 and UAH6.45 per cubic metre
households during togaz announced on January 27. (depending on the month of subscription to the
coronavirus lockdowns. "Naftogaz, as a price leader, set the lowest tariff).
price for gas for consumers in February. It is Naftogaz is the supplier of last resort (SOLR)
lower than the price recommended by the gov- and is ready to supply gas to all household con-
ernment [UAH6.99 per cubic metre] due to its sumers who are unable to source gas from other
own minimum margin," the group said in the suppliers at the price limit set by the govern-
press release as cited by Interfax Ukraine. ment for February-March of UAH6.99 per cubic
The reduction is part of a government deci- metre.
sion to ease the burden on Ukrainians suffering Chairman of the board Andriy Kobolev
as a result of the economic crisis of the last year, explained the price reduction was possible
as well as a popularist move by Ukrainian Presi- because the group operates without its own
dent Volodymyr Zelenskiy, whose approval rat- branches, prefers electronic services and works
ing has recently been battered in the polls. with the networks of the banks Oschadbank and
The decision has been criticised by the Inter- FUIB.
national Monetary Fund (IMF), which has He said that government regulation destroys
insisted that gas be sold at market rates as one competition, as evidenced by the absence of new
of the conditions of its $5bn stand-by agreement gas suppliers for households over the six years of
(SBA) agreed last year. the public special obligations (PSO, until August
The government has promised the measure is 2020) and the unwillingness of large market
“temporary”, but the IMF has suspended its SBA players to adjust to the situation after the PSO's
for the meantime due to backsliding on reforms cancellation and to abandon inflated prices.
and it is currently in talks with the government "Although we can continue competing with
and will want solid reassurances. each other within the marginal price, we hope
Previously the government promised to hike that this regime will be short-lived. All suppliers
rates but reneged on them. Domestic gas tariffs can accelerate the return to market conditions
remain a very sensitive political topic in Eastern by offering their customers not a price that was
Europe, where the population is used to getting cut from the top, but their own unique offer,"
all their utilities for free as a legacy of the Soviet Kobolev said. ™

P10 www. NEWSBASE .com Week 05 03•February•2021