12:10 05.04.2017

Naftogaz urges to liquidate monopoly of Group DF on market of gas supplies to households

2 min read
Naftogaz urges to liquidate monopoly of Group DF on market of gas supplies to households

National joint-stock company Naftogaz Ukrainy has urged Ukraine's Cabinet of Ministers, the market regulator (the National Commission for Energy, Housing and Utilities Services Regulation (NCER) and Ukraine's Antimonopoly Committee to consider the possibility of removing groundless monopoly of Dmytro Firtash's Group DF on the markets of gas supplies to households.

Naftogaz believes that gas suppliers in the current form are pseudo-suppliers. They fulfill the function of unnecessary intermediaries for households, as they are not responsible for risks linked to supplies of gas to end consumers.

Naftogaz is to provide gas for the needs of households in the unrestricted amount under the applications of these enterprises which are monopolists and have unrestricted access to consumers.

"Naftogaz being responsible for the formation of enough resource of gas does not have access to data on the volumes of actual consumption of gas by households and the company does not have any guarantees for payments for supplied volumes of gas with the enterprises. These enterprises are usually shell companies and they are not able to secure the payments," the company said.

Naftogaz is ready to present a decision allowing the removal of unnecessary intermediaries from Group DF from gas supply process to the government.

Naftogaz also paid attention that Group DF also controls a large share of the gas distribution market, a natural monopoly.

The EU countries impose tough transparency and report requirements on natural monopolies. The tariffs of the operators are regulated aiming to protect consumers from unjustifiable expenses and stimulating investment in infrastructure.

"In Ukraine operators of the distribution pipelines [so-called oblgases] are the most non-transparent market players. Naftogaz does not know what amount of gas for the needs of households from resources of Naftogaz is supplied to households in fact and who the recipients of this gas are. This gas could be supplied to industrial consumers," the company said.

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