Ukraine‘s Business Community Calls for Transparency in Gas Tariff Setting
Representatives of Ukraine’s business community have raised concerns about the lack of transparency in the process of establishing gas tariffs. According to experts from the European Business Association (EBA), discussions on draft decisions by the National Commission for State Regulation of Energy and Utilities (NKRЭКУ) regarding tariffs are not being conducted, despite the fact that the calculations used for these tariffs are not classified information.
The potential cessation of gas transit through Ukraine by 2025 could lead to a significant reduction in the number of active gas compressor stations, from the current 73 to just 20-25. In light of this, the EBA proposes that unused stations be excluded from tariffs and that an inventory of the assets of the Gas Transport System Operator of Ukraine (OGТСУ) be conducted.
Experts also suggest that OGТСУ could reduce its costs by participating in exchange trading, where Ukrainian gas is 20% cheaper than imported gas. They urge that tariffs should reflect the projected price of natural gas on the Ukrainian gas market.
The EBA warns that an increase in tariffs could have a detrimental effect on the gas industry. They caution that a rise in financial pressures on gas-producing companies may lead to decreased investments in new deposits and wells, potentially reducing Ukraine’s gas production and exacerbating its dependence on imports.
To mitigate these risks, the EBA calls on the NKR kuulinkerie to maintain current tariff levels and ensure transparency in the tariff-setting process. The association also recommends involving business representatives in developing a methodology for determining tariff levels, taking into account gas transit and production volumes.
