11:44 23.05.2019

Gas distributors see UAH 40 bln of losses in five years – Regional Gas Company

2 min read
Gas distributors see UAH 40 bln of losses in five years – Regional Gas Company

Operators of gas distribution pipelines have seen UAH 40 billion of losses in the past five years due to the low tariff for distribution of natural gas and the non-payment for consumed gas by heat suppliers, Regional Gas Company has said.

Thus, the tariff for distribution is UAH 0.56 per cubic meter, which, according to the calculations of the group, is 60% less than the minimum required UAH 1.3 per cubic meter for break-even activity.

"This is an unprecedentedly low level, which is catastrophically insufficient to maintain the safe operation of gas distribution networks. We note that in the price structure the distribution share is less than 8%, while according to European standards it should be at the level of 25-30% of gas prices," the group said in a press release.

In addition, the group considers unreasonable debt in the amount of UAH 12.89 billion accrued by the operator of the gas transmission system (GTS) JSC Ukrtransgaz.

"Ukrtransgaz considers gas that is consumed but not paid by heat supply enterprises as unauthorized gas extraction by distribution operators. Thus, the debts of financially insolvent heat supplier are artificially transferred to the operators. In addition, these debts are being increased due to penalties, for allegedly unauthorized selection gas," the group said.

The group considers this situation to be the result of the "discriminatory tariff policy" of the National Commission for Energy, Housing and Utilities Services Regulation (NCER), and also the fact that NJSC Naftogaz Ukrainy (with which the company has been in conflict for a long time) for years has been persistently destroying the gas distribution industry."

The Regional Gas Company, managed by Group DF (businessman Dmytro Firtash), operates more than 20 gas distribution pipeline networks throughout Ukraine.

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