On 18 January 2022, the Antimonopoly Committee of Ukraine announced the commencement of proceedings against LLC “Gas supply company “Naftogaz Trading” for violating legislation on the protection of economic competition through the abuse of its monopoly position in the wholesale natural gas market.
This is in relation to an agreement signed with JE Energy LLC. An agreement with JE Energy (related to Dmytro Firtash) was signed in March 2021. At the time, Naftogaz was headed by Andriy Kobolyev, the company’s COO Otto Waterlander was in charge of the relevant area of the company’s operations, and the direct signatory of the documents was Willem Coppoolse, head of Trading Business Division.
The contract in question has indeed enabled JE Energy to buy gas from Naftogaz at a price lower than offered to other household gas suppliers. It has also enabled the reselling of all gas purchased at the price of UAH 7.4 per cubic meter not to the households, but to commercial companies, for which the market prices could exceed UAH 40 per cubic meter. Naftogaz would still have been forced to supply gas for the household needs.
The contract with JE Energy has also created unjustified credit risks for Naftogaz, since it provided for post-payment for gas sold during the period up to October 2021.
Since October, Naftogaz has suspended the agreement signed by the company’s previous management with JE Energy LLC, thus having prevented potentially significant abuses. Debts owed by JE Energy to the national company under these agreements have not been repaid to date.
Having terminated this contract, the new management of Naftogaz anticipated over UAH 110 billion worth of losses for the state-owned company and, accordingly, excess profits for JE Energy.
Naftogaz is currently selling gas to all companies that supply it to households at a single price and on equal terms within the balancing group.