In March 2020, the wholesale price of natural gas for the needs of the population, heat producers and other protected consumers, to whom Naftogaz of Ukraine supplies gas under PSO, will be UAH 3.40 per cubic meter (excluding VAT, gas sales margins and gas transportation costs by main and distribution pipelines). This is 14% less than in February 2020. This was reported by the press service.
It is noted that due to the worsening economic situation in Ukraine because of the spread of the COVID-19 virus, Naftogaz was guided in calculating the price by both the previously approved legislative acts and additional market factors that took place in March.
In particular, since January 2020, the wholesale price of natural gas within the framework of PSO is calculated in accordance with the resolution of the Cabinet of Ministers of Ukraine No.17 dated January 24, 2020. The main indicator in this case is the actual results of exchange trading, which took place from 1 to 22 of the billing month at Europe’s largest gas hub (TTF).
“However, in March, a new liquid price indicator appeared on the domestic market. The operator of the gas transmission system of Ukraine held a tender for the purchase of gas for the period March-December 2020 and tenders have shown that there is significant competition in Ukraine, which leads to lower wholesale prices for the purchase and sale of gas”, the statement said.
In calculating the price of gas for the population in March, the company decided to take into account new market circumstances. As the Decree of the Cabinet of Ministers sets the maximum permissible price level, Naftogaz chose the lowest indicative price from two possible options: calculated according to the resolution of the Cabinet of Ministers and the average weighted price of the winners based on the results of the bidding for the supply of gas to the Operator of the GTS of Ukraine.
Thus, the wholesale price of March is 14% lower than the price of February and 21% lower than the settling price of March. The wholesale price list of Naftogaz is the basis for the formation of retail prices, which are the responsibility of the regional distribution companies.
“As a responsible company, Naftogaz is aware that it is now very important to support households. The stability of the Ukrainian economy as a whole depends on the economic stability of an individual family. The March price reduction of 14% is our contribution to minimizing the possible negative consequences of quarantine for each Ukrainian, for our state”, said Andriy Kobolyev, Chairman of the Board of Naftogaz.
In April 2020, Naftogaz also plans to calculate the gas price for protected consumers by the principle of choosing the lowest value from two alternatives: the indicative price as decided by the Cabinet of Ministers and the weighted average price of the winners based on the results of the bidding for the supply of gas to the Operator of the GTS of Ukraine.
To recap, in January, the Cabinet of Ministers introduced changes in the formation of gas prices for the population and district heating companies.
Earlier it was reported that Naftogaz had introduced a new methodology for calculating the January gas price.
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