Money for pipes: the truth about gas distribution payments

According to the State Statistics Service, the debt for the supply and distribution of natural gas is the largest among all types of housing and communal services. As of the end of January 2020, Ukrainians owed UAH 29.5 billion. During the year, this figure decreased, in September the debt amounted to UAH 21.1 billion, and at the end of October it increased to UAH 22.4 billion.

Moreover, the debt for the supply of gas (for gas as a commodity) arose, among other things, due to the quarantine ban of the authorities to disconnect debtors. But payment for gas distribution still raises many questions among Ukrainian consumers. And there are those who have not paid for the distribution yet.

At the same time, NEURC approved the draft tariffs for natural gas distribution services for 2021. According to it, this tariff will increase.

In social networks, some people are surprised – how people do not understand the importance of payments for gas distribution, and some blames the oligarchs for everything in every way.

Соцсети про плату за доставку газа 2020

Others posted a petition to abolish this fee. Moreover, we found several similar petitions.

Let’s figure it out: why do we need to pay for gas distribution and what exactly do we pay for.

How did the gas distribution fee appear

Since January 1, 2019, in Ukraine, gas distribution system operators (GDS operator) and gas suppliers are separate independent companies. GDS operator cannot supply natural gas but only distributes it, manages the gas pipeline system. This was done for the implementation of the Third Energy Package in the natural gas market and is another step towards the European energy community, explained Maryna Hrytsyshyna, Chairperson of the Ukrainian Bar Association's Committee on Energy, Oil and Gas, Advisor to Sayenko Kharenko, in a comment for Kosatka.Media.

“Due to such changes in the work of the gas market, household consumers must conclude a natural gas distribution agreement with the GDS Operator for gas supply and, separately, a natural gas supply agreement with a natural gas supplier. Therefore, from the beginning of 2020, consumers have to pay separately under two contracts,” the lawyer clarified.

Who gets paid for gas distribution

The GDS Operators receive this money, not by the company that supplies you with the actual gas. This is a payment for the normal functioning of the gas distribution system, with which gas is supplied from the main gas pipeline to individual consumers. And the distribution tariff is the only source of funding for this activity. Therefore, payment of the distribution tariff is important to ensure the gas distribution system's stable operation in Ukraine, Hrytsyshyna noted. Each GDS operator has its own gas distribution tariff. And all these tariffs are approved by the regulator – NEURC.

Петиция за отмену платы за доставку газа 2020People began to request to cancel the payment for gas distribution back in January 2020

How is the cost of gas delivery calculated and what does it depend on

Chernihivgaz explained to Kosatka.Media that the cost of gas delivery is calculated individually for each consumer.

The monthly payment amount depends on the volume of its consumption during the previous gas year (lasts from October 1 to September 30) and the delivery (distribution) tariff set by NEURC for a particular GDS operator.

Monthly payment = annual consumption/12 months*distribution tariff.

An example of calculation for a consumer from the Chernihiv region with an annual consumption of 200 cubic meters: 200 cubic meters/12 (months)*1.128 (distribution tariff approved for Chernihiv region for the 2nd half of the year) = UAH 18.8 per month.

“Payment for gas distribution in equal monthly payments allows consumers to reduce their financial burden during the heating season. Besides, knowing his monthly payment, the consumer, if desired, can pay several months in advance in one payment and save on banking fees (this is especially true for consumers with low consumption and, accordingly, the size of the monthly payment), Chernihivgaz explained.

The amount in your payment for gas distribution depends on two factors: how much gas you consumed last gas year, and on the distribution tariff (different for each regional gas, according to NEURC).

Last winter was warm (and most households burned less gas than usual). Therefore, this year we will receive small amounts. But the tariff will change from January 1 – for each region in different ways. It will be possible to view the new tariff for your regional gas on the official website of NEURC after its final approval.

Directly, the cost of gas delivery for each subscriber does not depend on their total number, because it is calculated based on the individual annual consumption volume and tariff.

Simultaneously, the tariff for gas distribution approved by NEURC is the cost of maintenance of the gas network divided by the ordered capacity (volumes of gas delivered to consumers). The costs of maintaining the networks depend on their length, the number of technological equipment, technical condition and do not depend on the amount of gas supplied by them. But with the same cost of network maintenance costs, the tariff will be lower with higher gas consumption (therefore, tariffs are different for each GDS operator).

Payment for all consumers, except for consumers with zero consumption, is calculated based on their consumption, not the number of gas appliances they use. The lower the total consumption in a gas year, the lower the monthly payment in the next calendar year.


Where are gas distribution fees spent

There are about 11.2 million residential gas consumers in Ukraine, and the length of gas distribution networks is almost 350 thousand km. To supply gas to consumers, it is necessary to maintain a certain pressure in the network and maintain these networks to prevent bursts and repair in case of accidents. The emergency gas service 104 is also financed from the gas distribution tariff.

“Bills for gas delivery are received by all consumers connected to the common gas distribution network - thereby they are given the technical opportunity to turn on any gas appliance at any time and use gas for their needs. This is exactly what the money that consumers pay according to the distribution tariff is spent on - for round-the-clock provision of such an opportunity, that is, the maintenance and maintenance of networks, maintaining proper pressure, the work of an emergency service, etc.”

And this is the answer to the question "why should I pay if I do not use gas." To not pay, you have to completely disconnect from the network, for which purpose - submit an application to your GDS operator for "cutting off". But in this case, if you want to use gas again, you will have to "crash" again and pay for connection to the network.

However, as Tetiana Boyko, coordinator of housing and communal and energy programs of the OPORA NGO notes in a comment to Kosatka.Media, Ukrainian consumers have faced a pronounced arbitrariness of regional gas companies more than once, so trust in them is deficient. And this is one of the reasons why consumers do not want to pay for gas distribution.

Roman Nitsovych, Head of Programs at DiXi Group, also believes that GDS operators should be asked how they use tariff revenues to optimize network performance. Including how they cope with improving accounting because the installation of meters is also their responsibility.


Is it possible to cancel the gas distribution fee

In short, the answer is no. All consumers in one way or another pay for the distribution (delivery) of gas in all countries. Ukrainians have also always paid for gas distribution. Before the division of the regional gas companies into two independent companies - suppliers and operators of gas distribution stations (regional gas companies) – this payment was included in the total gas price.

“Ukrainians don't like communists, but they want to live in communism. There is such an argument: "We built this pipe ourselves." But this is not a payment for the pipe, but its maintenance. And this is not only a question of your pipe section, but also of how the gas flows to it. It is pumped - this is the cost of pumping. There are technical staff working there; there is a line 104. Not paying is to deprive these people of their salaries. And this is a deterioration in the quality and safety of gas supply,” Andrian Prokip, an expert on energy issues at the Ukrainian Institute of the Future, commented on the situation with non-payments for gas distribution.

Tetiana Boyko considers proposals, including petitions, to abolish gas delivery/distribution payment as manipulation.

“After all, the authors of the idea are hardly deletants.GDS operators worldwide play a crucial role - they ensure the safe entry of gas into consumers' homes, servicing gas networks and equipment. The idea of ​​refusing to pay for the work of regional gas companies is tantamount to a proposal to leave people without gas,” she said.

The gas distribution (delivery) fee is a service charge, not a "pipe."

However, it is possible and necessary to revise and improve the distribution tariff, explained Roman Nitsovych.

“There are opportunities to improve gas distribution tariff. In most EU countries, this tariff depends not only on the fixed costs of maintaining the network but also on the so-called energy part, which depends on the consumed volume of gas passed through the pipes. Therefore, it is possible to introduce a two-part tariff, since operators have both fixed costs associated with the operation of the network and variables associated with the amount of process gas used for distribution, and depends on the volume of gas distribution,” the expert noted.

The current revision of the tariff, which should occur from January 1, 2021 (as mentioned at the beginning of the article), is because the tariffs have not been revised in the last period.

"This is a continuation of work with errors when the tariff was not revised, and the costs changed, because the cost of gas and the cost of the wage fund, equipment, etc. have changed," Nitsovych specified.

He also added that the cost of gas distribution in Ukraine is also influenced by a significant reduction in gas consumption - by almost 4 times. According to him, in 1991, Ukraine consumed more than 118 billion cubic meters of gas, and in 2019 – slightly less than 30. Basically, this is a reduction due to a reduction in gas consumption by industry.

But the population, together with heat producers, have halved gas consumption over the past 20 years – from 35 to 16 billion cubic meters. m. And the network is the same. And against the background of the fact that gas transit from Russia may be interrupted, a new challenge arises for the Ukrainian GTS system - how to maintain our considerable gas distribution network in the face of reduced gas volumes. The GTSOU is already thinking about this, and this issue should also be raised before the GDS operators, Nitsovych noted.

Who can pay the minimum

So, it is clear that it is impossible not to pay if the apartment or house is connected to the network. However, there are several categories of consumers who have a minimum fee.

On March 6, NEURC adopted a resolution that provides for a minimum payment for the following categories of consumers:

  • new consumers and/or households with a natural gas consumption period of fewer than nine months;
  • households that did not use gas for a long time, including which the gas distribution by sealing was stopped, but they were not separated from the gas supply system. They did not apply for the termination of the distribution agreement.

The minimum fee depends on the connected gas equipment and gas consumption rates.

A household with gas stove – 39 m3/12*tariff

A household with stove and gas water heater – 126 m3/12*tariff

A household with autonomous heating – 314 m3/12*tariff.

What about Europe? Are there any alternative ways to maintain gas networks

Maryna Hrytsyshyna believes that it is not worth comparing the distribution tariff payment level in Ukraine with the EU countries. Even between the EU countries, there is a big difference in the ability of the population to pay for gas and electricity. Thus, in some EU countries, only a few percent of the population may have energy poverty, while it can reach 20-30% in other EU countries.

According to Roman Nitsovych, there are also those in Europe who have debts for gas, including distribution. There are up to 7% of such consumers.

Tetiana Boyko notes that in Europe, mainly, the supplier exposes to the consumer one combined payment for both supply and distribution. The distribution fee is paid to the GDS operator.

The Kosatka.Media journalist in social networks came across an interesting proposal - that instead of consumers, gas suppliers pay for distribution fees, they say, they also earn from selling gas - even if they pay for the maintenance of the network.

Andrian Prokip notes that this idea is from the region “if my neighbor works and receives a salary, let him pay the communal apartment to maintain the entire entrance”.

“This is nonsense. But this is all from poverty. In fact, the consumer must pay for adequate service. And in our country, most of the population is insolvent and is looking for some options so as not to pay. And secondly, we have some post-Soviet heritage. After all, it never occurs to anyone to say to an operator, for example, of a mobile communication: "I paid money for the phone, so let the seller of the phone pay for my mobile communication." People pay UAH 200 for the Internet, UAH 400 for television, UAH 200 for a mobile phone. But they do not want to pay for gas delivery, ”the expert stated.

So should disciplined gas consumers be afraid that over $20 billion in debt threatens gas supplies already?

What can non-payments for gas distribution lead to

Against the background of the fact that the GDS operator has a tariff, including all the components of its costs, every unpaid penny is already a blow. He may, in particular, not pay off GTSOU for the formation of negative imbalances.

“It's hard to say if this is already a disaster. But in this dynamic it is already a movement towards disaster. If someone has not paid for the service, another must pay for it. Considering that GDS operators already have losses and debts to the GTS Operator, this is just another drop in the deterioration of the quality and safety of the service,” said Andrian Prokip.

Since the beginning of the year, Ukrainians consistently owe more than UAH 20 billion for gas supply and distribution.

Roman Nitsovych believes that it is worth looking at relative numbers, not absolute ones. In addition, there is the question of temperature coefficients - additional volumes of gas that individual operators have counted to consumers for bringing them to standard conditions (gas of a certain temperature and pressure). The regulator and the government consider these charges illegal. Network operators have their own position. Now the issue is being decided by the Supreme Court. His decision on the claim of a domestic consumer should become a precedent. But finally, the problem can be solved only with full commercial metering of gas and the transition to calculation for energy units, and not gas volumes, Nitsovych summed up.

And we conclude that you should not panic. But the accumulation of debt does not bode well. Moreover, if you do not pay for the service for the safe supply of gas, the quality of life of more than half of Ukrainians depends significantly on the heating season.


Tags: gas, tariffs, NEURC, , consumers

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