Minister of Energy and Environmental Protection of Ukraine Oleksiy Orzhel at a briefing on the results of the Government sitting briefed attendees on the approved decision to reduce gas prices for consumers by 25%.
In particular, the Minister drew attention to the fact that there were risks of not signing the gas transit contract, and many expected that the price of gas in January would rise to UAH 12,000-13,000 for gas as a commodity plus tariff for transportation, distribution, mark-up and VAT. The Government's decision on a guaranteed gas price was approved by taking into account possible risks to protect consumers from possible price hikes in the market.
"We have signed a contract on gas transit which allowed stabilize prices in the gas market", Oleksiy Orzhel stressed.
The Minister placed a special emphasis on many positive signals today:
-underground storage is 5.7 billion more gas than last year;
- signing of a contract on gas transit;
- large gas reserves in European gas storage facilities;
- warm winter and more.
He also informed about the formula according to which the gas price for the population will be calculated from January this year and which is a supplement to the public service obligations (PSO) mechanism. According to this formula, the price for consumers will make up UAH 4,650 per thousand cubic meters without VAT, and the population will pay even less than the guaranteed price set by the Government.
"We expect thee said positive trend in the market will continue. This formula will enable us to revise the possibility of decreasing gas price in February. The market should be not only for the consumer, but also for the trader: someone wins, someone loses. It is extremely important for us to prove to Ukrainian consumers before the full opening of the market from May 1, 2020 that the market works not only in the direction of increase but also in the direction of decrease", the Minister underscored.
The final price also depends on regional gas companies and distribution companies and will be around UAH 6,000-7,000 per thousand cubic meters. "This is a real saving for every family. The price set by the Government now is a marginal indicator. That is, it should be no more than UAH 4,650 per thousand cubic meters. But it may be smaller," Oleksiy Orzhel emphasized.