Ukraine Adopts Resolution on Gas Price Reduction for Consumers

The government of Ukraine has adopted the resolution on reduction of gas price, which set a threshold level of its cost for consumers.

This is the bottom of agreements of Presidents of Ukraine and Russia on December 17.

The National Commission for the State Regulation of Energy, in coordination with the Ministry of Economic Development and Trade is recommended to set from January 1, 2014 the threshold level of the price of natural gas, which is sold to establishments and organizations that are financed from the state and local budgets – UAH 2448 USD per 1000 cubic meters and industrial customers and other economic entities – UAH 3113 per 1000 cubic meters in the first quarter of 2014. The prices ignore value added tax, the collection as a surcharge to the existing natural gas tariff for consumers of all forms of property, in the amount of 2 percent, tariffs for transportation, distribution and supply of natural gas at regulated tariffs.

However, UAH 1309.2 per 1000 cubic meters is recommended to entities that produce thermal power plus related taxes and fees when it comes about the production and supply of heat and hot water (except for volumes that used for industrial activity) to population, religious organizations, national artistic unions and their regional units. This includes block boilers installed on the roof and attached rooms. In addition, for facilities, which provide services for heat and hot water supply to budget organizations, the recommended price of gas for heat production is UAH 2448 per 1000 cubic meters.

The government has recommended the National Commission for the State Regulation of public utilities to recalculate from January 1, 2014 set tariffs for thermal power to organizations that financed from the state and local budgets, industrial customers and other entities taking into consideration set by the National Commission for the State Regulation of energy under marginal price levels.

It is also recommended to local authorities to revise from the January 1, 2014 set tariffs for thermal power, heating and hot water supply based on marginal price levels set by the National Commission for the State Regulation of Energy.

The government ordered the state inspection for price control to provide entities with conclusions on economically reasonable cost while pricing for the production, transportation and supply of thermal energy, the provision of central heating and hot water.

In turn, the central and local executive authorities must ensure, within its competence, control of the related reduction of paid services to the population of enterprises by institutions and organizations, due to the decrease in the price of natural gas and heat.

1 Ukrainian grivna = 0.121433 U.S. dollars

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LNG World News Staff, January 06, 2014