For Ukrainians from June gas will drop by 6%

Для украинцев с июня газ подешевеет на 6%

Since the beginning of the year, the price of natural gas for the needs of the population decreased by 54%.

In June, the wholesale price of natural gas for households, heat producers, and other protected consumers, which the “Naftogaz of Ukraine” gas supplies in the framework of the special obligations (PSO) would amount to 2,142 thousand UAH per thousand cubic meters (without VAT, margins of gatsbies and the cost of transportation of gas transmission and distribution pipelines).

This is 5.9% less than in may 2020, says the company.

It is noted that since the beginning of the year, the price of PSO declined by 54%, as compared to the same period last year, the fall in the cost of natural gas reached 61%.

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The analysts of “Naftogaz” noted that the pace of falling prices has slowed and in June began to notice a trend of recovery of cost of energy: prices on the main European hubs grow from the second week of June for the current month and future periods.

According to the press service, among the main factors — the abolition of a large part of deliveries to Europe liquefied natural gas in June and July, industrial production growth after the lifting of the quarantine and the transition of European stations heat generation in gas instead of coal.

It is reported that at the same time, domestic prices in Ukraine remain below import parity. According to analysts of the company, weak demand for gas in the world and high stocks in Europe will continue to put pressure on prices in key gas markets. It is expected that by the end of the season the level of stock in UGS will approach its maximum. This will help suspend any initiatives to inject gas and low demand will lower prices. Change in price trends are possible closer to the heating season.

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As noted by the head of Board of “Naftogaz” Andrey Kobelev, the price of gas in Ukraine today is defined by the formula, it does not depend on “Naftogaz”, it depends on the price in the European market. Now the price is falling, however the market has a cycle and it will start to grow sooner or later.

“The first of July, we expect the abolition of the special obligations that do not already protect consumers, but restrict their rights: households cannot choose neither the conditions nor the services, nor the price. The opening of the market and suppliers, and consumers. Change the format of the gas trade in the retail segment will significantly improve customer service standards, and competition among suppliers will give people many options for the price. I hope this week the government announced a competition for the provider’s last hope (PPN), and this will allow the long-awaited liberalization of the gas market in Ukraine”, — the press service quoted KOBOLEV.

As reported, in late December 2019, the Cabinet of Ministers provided an opportunity for heat-generating businesses to reduce the existing tariffs for heat depending on market gas prices.