Ukraine Gas Price May Increase 5-Fold

Ukraine Gas Price May Increase 5-FoldUkraine Gas Price May Increase 5-Fold

Gas tariffs for domestic consumption may increase three to five-fold in Ukraine, Naftogaz CEO Andrei Kobolev said on Friday, Itar-Tass reported.

 “The government is currently considering the issue of raising gas prices,” he said. It could be three to five-fold. We have ungrounded low prices for consumers.”

He said the gas prices would be adjusted against weighted average import price. The final decision, in his words, had not yet been taken. Apart from that, people who would be unable to pay the new price in full would be eligible for subsidies.

Kobolev also hoped that Naftogaz will be able to purchase Russian natural gas at less than $340 per 1,000 cubic meters.

After the discount that Gazprom granted to Naftogaz upon the end of trilateral talks in Brussels on October 30, the price of gas the Russian corporation set for Ukraine totaled $378 per 1,000 cubic meters for the 4th quarter of 2014 and $365 for the first quarter of 2015.

“We hope the price will be less than $340 already in the first quarter of the year under the contract we signed in the autumn in Brussels,” Kobolev said.

“The price for Europe is much lower now and, quite possibly, it will be still lower.”

He noted an overall tendency towards a decrease of prices on the market of energy resources, especially in the summertime when the prices generally go down in the absence of heating.

Russia cut gas supplies to Ukraine in June because of a dispute over prices and unpaid debts. Moscow resumed supplies earlier this month after the two sides signed an interim agreement for the winter period.

Ukraine, a traditional importer of Russian gas, plans to buy one billion cubic meters (bcm) of gas in December. Ukrainian energy officials have said the interim agreement allows Kiev to import a total of 5 bcm of gas.