10:31 15.08.2019

Govt decision to supply gas to Luhansk TPP at low price to cost UAH 120-300 mln every month to Naftogaz, budget – Naftogaz

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Govt decision to supply gas to Luhansk TPP at low price to cost UAH 120-300 mln every month to Naftogaz, budget – Naftogaz

The decision of the Cabinet of Ministers of Ukraine on supplies of gas for Luhansk thermal power plant (TPP, DTEK Skhidenergo) at the price that is lower than the market price would cost from UAH 120 million to UAH 300 million to NJSC Naftogaz Ukrainy and the national budget every month, Naftogaz has said.

"The implementation of the government decision only in August will entail a loss in the amount of UAH 120 million per month for Naftogaz. If the situation continues in the winter, with the increase in the market prices and consumption, the amount of the loss will reach UAH 250-300 million per month," company said in a press release.

Naftogaz considers the government's decision to be discriminatory (in relation to other thermal power plants), undermining the market conditions for the functioning of the energy market, and they also see in it a precedent for direct state intervention in relations between business entities.

The Cabinet of Ministers, in order to prevent an emergency at the Luhansk TPP located as a "separate" island, ordered Naftogaz Ukrainy to supply gas to the station at a price lower than the market price. The corresponding document was adopted at a government meeting On Wednesday, August 14.

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