16:12 20.09.2017

Gas prices should not depend on political factors

Gas prices should not depend on political factors

Prices for natural gas should not depend on any political figures or factors, Naftogaz Ukrainy Head Andriy Kobolev believes.

"We can talk about different mechanisms [of pricing], we can talk about hubs, the domestic market or other principles, but we need to clearly understand the main requirement of Western partners, with which we completely agree – gas prices must be depoliticized," he said at a press conference in Kyiv.

According to him, it is necessary to remove the mechanism under which someone takes responsibility for determining the price of gas.

"This will always be a problem for most politicians and not only in Ukraine, but throughout the world," he said.

Kobolev noted that according to the governmental resolution on the special obligations of Naftogaz for selling gas to the population and heating companies, the Ministry of Energy and Coal Industry should have published the corresponding price.

"The proposed mechanism does not work automatically. The price for the fourth quarter of this year has not yet been determined by the responsible body in the person of the Ministry of Energy, which creates huge risks for the entire market. For gas imports, for credit resources, for thermal generation non-availability of a predicted price is a big problem", he added.

The supervisory board spent a lot of time discussing and approving decisions and given that the Cabinet is bigger, approval of the required operational decisions will slow substantially, he said. It will also inject an additional element of politics into management of the group.

As of today, only Naftogaz's financial plan has been approved, while the corresponding documents for Ukrgazvydobuvannia, Ukrtransgaz and Ukrtransnafta have not been approved yet, which will affect investment in the gas transportation system and domestic gas production, he said.

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