Parliament amends calculation of gas price to set royalties

15:47, 24.11.2015 1 min read

The Ukrainian parliament has amended the Tax Code and changed the conditions of calculating the sale price of natural gas for royalties for the use of deposits during gas production.

Government bill No. 3037 was passed at second reading by 232 lawmakers.

The amendments to the Tax Code bring the calculation of the royalty in line with the requirements of the law on the natural gas market. Previously, the calculation of the royalty was pegged to the upper price of natural gas set by the National Commission for Energy, Housing and Utilities Services Regulation (NCER) before October 2015.

"Starting from January 1, 2016, the tax agencies will not be able to calculate the royalty for Ukrainian producers. We've proposed the amendment where the royalty for Ukrgazvudobuvannia will be calculated based on the price outlined in the agreement signed by Ukrgazvudobuvannia and Naftogaz which buys this gas. The royalty in line with the market price will be calculated for the rest of commercial suppliers and gas producers," Energy and Coal Industry Minister of Ukraine Volodymyr Demchyshyn said.