Ukrtransgaz calls on government to cancel customs duties for users of UGS facilities

"JSC Ukrtransgaz has addressed the Cabinet of Ministers of Ukraine to cancel the obligation to pay customs duties when placing natural gas into storage in ‘the customs warehouse’ mode," reads the statement.

The payments are compulsory in line with the Cabinet of Ministers' resolution "On amendments to the resolutions of the Cabinet of Ministers of Ukraine as of May 21, 2012, No.450 and No.461".

The company stresses that the need for providing customs duties of at least 20% of the customs value of stored natural gas significantly reduces the economic attractiveness of “the customs warehouse” service. It notes that additional difficulties arise for non-resident companies that need to find Ukrainian partners to secure customs payments in Ukraine.

Ukrtransgaz notes that the number of companies, especially foreign ones, storing gas in Ukrainian UGS facilities could be significantly reduced, and the involvement of new customers of gas storage services could be complicated. This, in turn, will lead to a reduction in payments from Ukrtransgaz to the state budget and a weakening of Ukraine's position on the European gas market.

As reported, “the customs warehouse” regime provides for storage of gas in Ukrainian UGS facilities for up to 1,095 days without paying customs duties. As of January 1, 2020, gas stocks in the "customs warehouse" regime, stored by 29 contractors, amounted to 8.2 billion cubic meters (about 30% of the total volume of gas storage), including natural gas of non-residents - 2 billion cubic meters.

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