Energy minister expects drop in price of imported gas to be below $250 per 1,000 cubic meters in Q2-Q3
Ukraine hopes the price of imported gas will continue to fall which will boost the competitiveness of domestic industry and ensure a balanced gas price for households, according to Energy and Coal Industry Minister Volodymyr Demchyshyn.
"We expect that in the next two quarters we'll be able to buy gas at a price lower than $250 [per 1,000 cubic meters]," he said in parliament on Friday.
The National Commission of Ukraine for Energy, Housing and Utilities Services Regulation (NCER) will review the gas pricing formula for households every quarter, as was agreed with the International Monetary Fund (IMF), Demchyshyn said.
According to him, it is currently not possible to provide households with domestically produced gas only, as Ukrgazvydobuvannia, which is a subsidiary of NJSC Naftogaz Ukrainy, produces 12.8 billion cubic meters, while households consume 14 billion cubic meters directly and another 6.8 billion cubic meters is used for heating via municipally owned heat suppliers.
"A difference of 9 billion cubic meters should be bought from outside. The price is $250 [per 1,000 cubic meters] now. It was higher than $300 during the heating season. The [2015] budget is based on $260-270," he said.
He said that the major problem is that households consume too much gas.
Demchyshyn said that another 1.5 billion cubic meters of gas is produced by Ukrnafta where NJSC Naftogaz owns 50% plus one share. However, the company isn't under the government's control now and uses that amount of gas for its own needs.
"The law [on a reduction in the quorum from 60% plus one share to 50% plus one share] will become effective as of May 26. I think we'll hold a meeting with the supervisory board jointly with Naftogaz, call a [shareholders'] meeting and change [Ukrnafta's] management," Demchyshyn said.
Under the coalition agreement and the cooperation program with the IMF, the ultimate aim is to ensure fair gas prices within 2015-2017, he said.
He added that only such a market-oriented single price will help eliminate corruption in the energy sector.
