Upon the order of the Cabinet of Ministers of Ukraine, Naftogaz and government representatives have developed a new mechanism to calculate regulated gas prices. Not only will this solution help to avoid an increase in gas price for households and heat producers on 1 May 2019, but it will also allow for a reduction in gas price to UAH 8247 per thousand cubic meters (retail price). This pricing approach was agreed at a meeting attended by Ukraine’s Prime Minister Volodymyr Groysman and Naftogaz CEO Andriy Kobolyev.
The new mechanism is based on the following pricing principle: if the market price for industrial users is lower than that stipulated in CMU Resolution #867 of 19 October 2018, the price for households must be adjusted downwards accordingly. If the market price for industrial users is higher than the level set by the government, the price for households stays at this level.
The relevant amendments to current gas sales agreements between Naftogaz and all counterparties buying gas under the Regulation on Public Service Obligations are expected to be made during May 2019.
NJSC Naftogaz of Ukraine