Naftogaz says it will be obliged to increase price of natural gas from May 1

"The price of Naftogaz for gas for retail gas suppliers for the population, heat energy producers and other protected categories of consumers will grow by 15% from May 1, 2019 to UAH 7,184.80 per 1,000 cubic meters (excluding VAT and costs for transportation and distribution). At the same time, the market price of gas for May published by the Ukrainian Energy Exchange as of April 16 amounts to UAH 6,800 per 1,000 cubic meters, including VAT, or 27% lower than the price calculated according to the requirements of the Cabinet of Ministers," Naftogaz said.

At the same time, according to the company, without the decision of the Cabinet of Ministers to repeal the clause on the imposition of special duties, Naftogaz has no right to independently reduce the cost of the resource it supplies to retail gas suppliers, heat producers and other consumers subject to the clause.

"On April 9, 2019, NJSC Naftogaz of Ukraine appealed to the Cabinet of Ministers of Ukraine with the request to cancel or amend its provision on the imposition of special duties, which requires an increase in gas prices for the population from May 1, 2019. It is currently mandatory for Naftogaz to comply with the requirements of Cabinet of Ministers resolution No. 867 of October 19, 2018, which approves the clause on the imposition of special duties on natural gas market players in order to ensure general interest in the functioning of the natural gas market," the report reads.

The company states that resolution No. 293, approved by the government on April 3, 2019, does not exempt Naftogaz from its obligation to comply with the current resolution No. 867, taking into account the rules of direct effect of Articles 8 and 19 of the Constitution of Ukraine. It also does not impose new special duties on Naftogaz and does not cancel the current clause on the imposition of special duties.

"Naftogaz has repeatedly appealed to the government with the request to cancel resolution No. 867 or to bring the price set by it to a market level. The violation of this clause threatens the company and its officials with liability for violation of the licensing terms of natural gas supply and liability for criminal offenses," the company said.

In early April, the Cabinet of Ministers passed resolution No. 293, which obliged Naftogaz to sell natural gas for the needs of the population at the price of natural gas for industry, but not higher than stipulated in the clause on the provision of special duties.

op