The Cabinet of Ministers is dissatisfied with the financial plan of Naftogaz

The Cabinet’s experts found out a hidden deficit in the amount of 84.5 billion UAH in the financial plan of NJSC Naftogaz of Ukraine.  Ukrainian news writes about this with the reference on the analysis results of proposed by NJSC’s financial plan from the Ministry of Finance, the Ministry of Energy and Coal Mining and the Ministry of Economic Development and Trade.

Ministries criticized the financial plan and said that it should be finalized.

The explanatory note to the financial plan states that Naftogaz included compensation for losses from the sale of gas under special obligations in the “other operating income” section. The amount of compensation is 69.2 billion UAH, but this amount is not included in the state budget of 2019, the Ministry of Economic Development and Trade notes this.

According to the Ministry of Finance, this amount is included in the hidden deficit of Naftogaz, which generally amounts to 84.5 billion UAH.  

The Ministry of Finance is not satisfied with the expenditure part of the financial plan. It provides for expenses from ownership participation in the amount of 19.2 billion UAH, and revenues in the amount of 9.4 billion UAH. This, according to the Ministry of Finance, leads to a decrease in net profit due to the absence of a justification and calculation of these losses.

NJSC Naftogaz includes to its plans an increase in expenses from investment activities from 6 billion UAH in 2018 to 37.3 billion UAH in 2019. The purchase of Ukrnafta’s assets is the main part of these expenses. The Ministry of Finance states that Naftogaz did not provide information on the advisability of buying assets.

In 2019, Naftogaz plans to spend more than 3 billion UAH on non-core activities, the effectiveness of which is not confirmed. The company plans to invest 1.7 billion UAH in the authorized funds of subsidiaries, to invest abroad 1.2 billion UAH and to spend 198 million UAH on the maintenance of overseas representative offices, the Ministry of Finance emphasizes.

The Ministry of Finance is opposed to the increase in payments to administrative and management personnel. The Ministry said that Naftogaz should review the payment of not 50%, but 90% of the company's profits for 2018, as stipulated in the state budget of the current year.

The Ministry of Economic Development believes that it is necessary to provide in the financial plan for the repayment of penalties in the amount of 2.6 billion UAH for the late transfer of NJSC’s profit  to the state budget for 2017.

The Ministry of Energy believes that Naftogaz should clarify information on gas production, on gas volumes in storage facilities (as of January 1, 2019 and expected – as of December 31, 2019) and on staff salary expenditure.

The financial plan provides for an increase in the expenditure of most items of expenditure by 25 billion UAH – almost to 232 billion UAH, these costs require additional clarification.




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Tags: The Cabinet of Ministers, Gazprom, gas, Naftogaz, The Minystry of Energy and Coal Mining

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