The Cabinet of Ministers of Ukraine proposed that the royalties for the use of deposits for gas that is sold for needs other than those of households be increased to 70% irrespective of the depth of wells where it is extracted.

The initiative is stipulated in draft law No. 4309A registered in the Ukrainian parliament.

At present, the royalties for the use of deposits during gas extraction which is sold for needs other than those of households amount to 28% of the cost of gas for the depth from five kilometers and 15% for the depth over five kilometers.

The royalties for the use of deposits during extraction of gas for the needs of households will be retained at the current level: 20% of its cost for gas from the depth of up to five kilometers and 14% for gas extracted from the depth of over five kilometers. It is also proposed that the royalty for the use of deposits during extraction of gas on the shelf not be revised (11%).

As reported, Ukraine raised gas production by 1.5% or by 142.1 million cubic meters on the continental part of the country in January-June 2014 year-on-year, to 9.821 billion cubic meters (bcm), including a 1.8% increase or 166.1 million cubic meters to 9.468 bcm of natural gas. Naftogaz's enterprises, not taking into account Chornomornaftogaz, cut gas production by 2.5% or 211.8 million cubic meters, to 8.396 bcm, including 8.09 bcm of natural gas, down 2.3% or 189.8 million cubic meters.

Other oil and gas companies operating in Ukraine raised output by 33% or 353.93 million cubic meters, to 1.425 billion cubic meters of gas, including 1.378 billion cubic meters of natural gas, up 34.8% or 356.01 million cubic meters.