Acting Minister of Energy Yuriy Vitrenko posted on his Facebook page the measures that, in his opinion, need to be taken in Ukraine in order to resolve the gas market crisis. Among these measures there is also a clause on gas exports by independent companies from Russia.
«The decision on the maximum gas price (6.9 UAH per cubic meter) will be temporary—during quarantine measures. At the same time, we need a permanent solution to the gas market problems: misuse of dominant position, protection not only from energy poverty, but also from other aspects of consumer vulnerability, and the like. The temporary decision of the Cabinet of Ministers is just an opportunity and a reserve of time to develop such a systemic solution with full involvement of stakeholders.»
Acting Minister of Energy
Vitrenko suggested the following steps to solve the gas market problems:
- Energy efficiency, namely the inefficient consumption reduction. In this matter, according to the Acting Minister, it is necessary to start with economic incentives and accounting. It is also necessary to create an ecosystem to attract private business and foreign investment. It is necessary to start now, and Ukraine will get the result in years.
- Increase in own production. For this, Ukraine needs to attract international investors with money and technology. If we start now, then a significant increase can be obtained in three to five years. If the first clause also works, then the country will be able to start exporting gas, and not importing it. And due to that the price on the wholesale market will be at the level of export parity, and not import.
- Unblocking of gas transit from Central Asia, gas export by independent companies from Russia (it is about gas export by companies independent of Gazprom that produce gas in Russia, including large European companies), transfer of transmission points to European buyers of Gazprom's gas. Such actions will significantly reduce the gas price on the wholesale market.
- Exchange trade in gas in Ukraine. According to Vitrenko, an exchange is needed that is effectively regulated by the state and has the necessary attributes of a modern exchange (for example, clearing). This exchange should have active gas trading with a fixed annual price that will provide a reliable indicator of the market price in the Ukrainian wholesale market. An alternative to this could be the use of the European exchange for trading gas with delivery in Ukraine.
- New rules for protecting consumers in the gas market, in particular vulnerable consumers. "In Europe, there are options when suppliers are chosen by consumer associations. In addition, they can provide a professional person for this. In Ukraine, united territorial communities can be used for this, These communities will choose a supplier for those who do not want or cannot do it on their own," Vitrenko explained, adding that by default UTC will be able to choose a supplier for you. It will also apply to those consumers, whose supplier has automatically become the "supplier of last resort". Now it is Naftogaz.
Context. Earlier, the Ministry of Energy offered to limit and fix for a year the gas price for "vulnaerable" consumers at the "hub minus" level with the addition of a certain marginal markup of suppliers from February 1, 2021.