Published On : 2019-06-07
The Ukrainian government under the leadership of Prime Minister Volodymyr Groysman has asked Naftogaz, a state-owned oil and gas company in Ukraine, to drop natural gas prices by 800-900 Ukrainian hryvnia (UAH) per 1,000 cubic meters for households as early as this month. Until the end of next year, electricity prices for households will be retained at the current level, as per a resolution passed by the government. Furthermore, the National Bank of Ukraine (NBU), the country’s central bank, has decided to not change the key policy rate to avoid inflation risks. Currently, the key policy rate is at 17.5% per annum.
“Naftogaz has approved June prices that are larger than the market prices. The company plans to do the same thing with prices for July. I emphasize that this is unacceptable. Hence, another regulatory document has been developed by us that’ll prevent Naftogaz from abusing its position of monopoly. And, the company is really a monopoly – an insatiable monopoly, I would like to include one more word here. We must bring the company to senses, I emphasize,” said Groysman.
Government appeals to create a joint group to audit prices
For industrial consumers in Ukraine, gas prices have been reduced due to the significant drop in the prices across world markets, according to Groysman. However, gas prices for Ukrainian households have remained at a high level. For this reason, the government demanded Naftogaz to reduce gas prices for households. A Naftogaz spokesperson said that the company has already dropped the wholesale gas price according to the dynamics of market prices.
“In July, the ultimate retail price for households, depending on the regional gas tariff, will be between UAH 7.6 to UAH 8.2 per cubic meter of gas,” reported the Naftogaz press service.
According to sources, the Ukrainian government has appealed for the formation of a joint group to audit the pricing mechanism at issue. The appeal has been made to the State Audit Service, the State Fiscal Service, the Antimonopoly Committee, and the Court of Accounts. The Ukrainian government has also made an important move to freeze electricity tariffs for households under new market conditions applicable from July 1, 2019.
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