Register of gas consumers: to be or not to be?

What is a common base of natural gas consumers?

Representatives of state-owned “Naftogaz” and “Ukrtransgaz” have started announcing actively the necessity of developing a common register of region gas consumers since the beginning of 2018.

The database is a list of consumers, who buy and consume natural gas, produced or imported by NPC “Naftogaz”.

Why the consumers’ base is necessary?

The head of NPC “Naftogaz”, Andrei Kobolev, explains the need to create a register of consumers by the fact that in its absence there is a problem with the theft of gas, which is purchased from a state-owned company at preferential prices. It is assumed that the published database will reduce the number of non-existent household consumers of natural gas, to which regional gas companies write off “preferential gas” for profit.

Illegal earnings occur on the difference of the full price of gas and preferential.

Since November 1, 2018, the price of natural gas for the population has increased by 23.5% and amounts to 8,550 UAH/thousand cubic meters, while the preferential price is 4,815.2 UAH/thousand cubic meters.

According to the Head of “Naftogaz”, the number of such “preferential consumers” in the overall structure is 10%, and Kobolev estimated the loss from them at $700 million, which is equivalent to about 2 billion cubic meters of gas.

How did Ukraine try to legislate the need to transfer a common register of consumers to “Ukrtransgaz”?

The first attempt to legislate the obligation of transferring the register to state companies was carried out in March 2018, when Deputy Tatyana Chernovol proposed to amend the Act "On Ensuring Commercial Accounting of Natural Gas”. The draft law No. 6391-1 proposed to create the necessary common base of subscribers based on automated computer systems that would provide a full commercial accounting of natural gas volumes in Ukraine.

However, this proposal was not supported by the deputies, and at a meeting of the Verkhovna Rada the draft law was returned to the initiator.

Later, in June, another attempt was made to conduct a draft law through the Verkhovna Rada, which would oblige to create a common consumers base. The deputy Ivan Vinnik, introduced amendments to the transitional provisions of the Act “On National Security”, which proposed amending the Act “On Ensuring the Commercial Accounting of Natural Gas”. Changes similarly had to ensure the transfer of data on all connections of regional gas companies, information on meters (including their numbers, names and addresses of owners) of a company belonging to the Naftogaz Group – “Ukrtransgas”, as a company holding a license for natural gas transportation.

In addition to data transmission, a proposal was made to separately consolidate at the legislative level the obligation of regional gas companies on timely submission and updating of data on fuel consumers.

 However, this time, on June 21, 2018, the Verkhovna Rada refused to support the initiative to create a common register of consumers.

Further, on October 19, the government adopted Resolution No. 867 extending special obligations, as well as gradually increasing the price of gas for the population. In addition to these innovations, the Cabinet of Ministers of Ukraine obliged gas transmission system operators to submit the information on each household consumer to the Ministry of Finance of Ukraine by December 15, 2018. The information must contain the name of the consumer; type of object (private house; apartment, etc.); mailing address; details of the agreement on the transmission of natural gas, signed by the consumer; and ЕІС-code (Energy Identification Code).

Also, by this Resolution, gas suppliers were obliged on a monthly basis, up to the 15th day of each month (starting from January 2019) to submit to the Ministry of Finance the information on the actual use of natural gas in the context of each consumer to whom the operator provides the resource.

Despite the signing by the Cabinet of Ministers the Resolution No. 867, on December 4, the press service of the “Regional Gas Company” published a report that the District Administrative Court of Kyiv suspended the provisions of the Regulations relating to the transfer of data on consumers. The court ruled that these requirements violate the Constitution of Ukraine, as well as the Convention for the Protection of Human Rights and Fundamental Freedoms. The Cabinet of Ministers was unable to challenge such a counter-argument, as a result the part of the Resolution, which deals with the transfer of data on consumers, is not valid today.

 

The further fate of a common base is still undefined.                               

For today, there are no specific dates to which the regional gas companies must transmit data on consumers. Also unknown are the dates for consideration of other laws and regulations that will approve such a need by law.

The lack of a common base of consumers of natural gas also prevents Ukraine from switching to daily balancing. While “Ukrtransgaz” creates and refines the information platform for daily balancing, regional gas companies must ensure that the consumers’ base is filled.

Until the issue of creating a register of consumers begins to move more intensively, gas transmission system operators will continue to illegally earn money thanks to such a “gap” in the system, causing serious blows to the budget of both “Naftogaz” and the whole of Ukraine.

 

 

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