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    January 1, 2016

    Naftogaz Suggests To Gazprom New Prices For Gas Transit

    Translated by Ollie Richardson for Fort Russ
    1st January, 2016

    "Naftogaz of Ukraine" has suggested to Gazprom to hold negotiations in connection with the adoption of new pricing rules for services in gas transportation in Ukraine. This was stated in a message published on the website of the Ukrainian company.

    The press release states that the new rules were established on December 29th with the National Commission carrying out state regulation in spheres of power and utilities (NCSEPUR). "Earlier the cost of the transit of gas was not regulated by the state and was determined only by a bilateral contract between two economic entities, "Naftogaz of Ukraine" and PJSC "Gazprom", thus, the appropriate rates were determined", — the message underlined.

    The Commission received such powers in accordance with the adopted law in the spring of 2015 "On the natural gas market", which introduced in Ukraine the norms of the  legislation of energy of the European Union. Naftogaz is currently reviewing new rules for the pricing of gas transportation against the what was already established, the company message stated.

    On December 29th, a fivefold increase in tariffs for gas transportation was announced. From the 1st January 2016, for all entry points in the gas transportation system of Ukraine, the tariff level will be $12.47 per 1 thousand cubic meters of gas, with exit point rates ranged from 16 to 33 dollars.

    According to the 2009 contract between Naftogaz and Gazprom, the tariff rate for gas transportation through the territory of Ukraine varies, and is determined by the formula depending on the value of the fuel components and inflation in Europe. In the second quarter of 2015, the rate of transit of natural gas through Ukraine under contract with Gazprom was $2.7 per 1 thousand cubic meters on 100 kilometers.

    On the 24th of December, the Antimonopoly Committee of Ukraine recognized the Gazprom monopoly. The controller, on the 14th January 2016, will hold a hearing on the case in which the Russian company is accused of abusing a dominant position on the market of transit of gas.

    Naftogaz estimates the damage from possible abuses by Gazprom at six billion. According to the head of the Antimonopoly Committee of Ukraine, Yuriy Terentyev, the volume of gas transit through the country decreased from 92 billion cubic meters in 2010 to 62 billion in 2014, but in accordance with the contract, this figure should reach 100 billion cubic meters.
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