The population will get a reduced gas price as early as in December, while protected consumers will be offered several price options starting January 1, 2020.
The price of natural gas for consumers who purchase gas under the terms of ISO (imposition of special obligations on market participants which will ensure compensation for the difference between market and regulated electricity prices for the population) in December 2019 will amount to UAH 4,277 per thousand cubic meters of gas (excluding VAT, margins by gas providers and transportation costs).
This is 13% below the regulated gas price level applied in November 2019.
This level is calculated according to the formula contained in the Resolution of the Cabinet of Ministers of Ukraine No. 293 dated April 3, 2019. This Resolution is valid until the end of this year. From January 1, 2020, Ukraine switches to market pricing of gas for domestic customers within the ISO framework.
Hence, from January next year, the population will have a chance to choose a favorable pricing system.
It is offered to introduce a guaranteed quarterly price, which will be applied from January 1, 2020, until the end of the heating season.
The guaranteed wholesale price from NJSC Naftogaz of Ukraine is fixed at UAH 5,500 per thousand cubic meters (excluding VAT, margins by gas providers and transportation costs). This proposal will allow to protect household consumers from the sharp rise in gas prices that may occur in Q1 2020.
The offered guaranteed price is 12% lower than the regulated price at which Naftogaz of Ukraine was selling gas to protected consumers in January-April 2019. At that time, the wholesale price for consumers under the ISO conditions was UAH 6,236 per thousand cubic meters.
The final retail price for domestic consumers in each region depends on the cost of gas transportation through main and regional gas pipelines, as well as on the mark-up set by gas supply companies. Taking into account current transportation tariffs, the final retail price including VAT will be from UAH 7.2 to 7.8 per cubic meter of gas (against UAH 8.5 per cubic meter of gas in Q1 2019).
The guaranteed gas price will be in effect for both domestic consumers and thermal energy producers, which will allow to avoid a sharp increase in the cost of heating and hot water services.
From January 1, 2020, and until the end of the heating season, all households and heating supply companies will automatically receive gas at a guaranteed price. Consumers do not need to take any action, sign additional agreements or make a prepayment.
The monthly market price in Q1 2020 may either rise or fall, depending on the results of negotiations with Gazprom, weather conditions, market situation and other factors.
Any consumer can turn down the offered guaranteed quarterly price and choose a monthly market price. In this case, from December 10 to December 24, 2019, such consumers should contact their regional providers for them to offer the most convenient algorithm how to refuse from the guaranteed price.
After December 24, 2019, consumers who choose a monthly price will not be able to use the guaranteed price. NJSC Naftogaz of Ukraine traditionally publishes its price quotations for the next month after the 20th of the current month.