The price of gas for the population can now change every six months

The Cabinet introduced two new concepts – the “gas year” and “half gas”.

The government of Ukraine approved a new procedure for reviewing maximum retail prices for natural gas for population and enterprises Teplokommunenergo (CTV). Now the price adjustment may be carried out every six months (April 1 and October 1) in the case that the cost of imported gas will increase for the first half more than 10%.

This is stated in the resolution of Cabinet of Ministers №90 from 21 February, which amended the decree of October 1, 2015, on imposing special obligations on gas supplies to Naftogaz.

How to write Ukrainian news, the previous edition of the government resolution on laying on Naftogaz special obligations provided for quarterly adjustment of gas prices for the population in case of significant changes in the import parity prices, but the mechanism of such conversion in the old version were not spelled out. Now the Cabinet introduces two new concepts – the “gas year” (October 1 to September 30) and “half gas” (from 1 April to 30 September and from 1 October to 31 March).

Under the new changes, the obligation to calculate the maximum retail gas price for the population and CTV entrusted to the Ministry of energy and coal industry.

When calculating the maximum retail prices of gas for households and CTV, the Ministry will take into account: the monthly average gas prices in the German hub NCG (per semester) taking into account transportation costs to the Ukrainian border and the entrance to the CTA in terms of the official rate of NBU for the 2nd and 3rd months of the current gas semester (either may-June or November-December), as well as the tariffs for supply and distribution of gas within Ukraine, VAT and trade margin of the supplier. Such calculations of the energy bound to carry out 2 months before the start of each gas following semester and to publish them on its website.

If current gas prices deviate from the calculations of the energy more than 10%, the Cabinet is reviewing them, if less, the prices remain the same.

The first repricing can be carried out from 1 April. But since the current prices for natural gas for population and CTV operate from may 2016 (will be 11 months at the time of a possible revision in 2017), the calculation of the new prices, the energy Ministry will consider the quotes for the German gas hub for this entire period – from may 2016 to March 2017.

The order also provides that if there is to be adjusted to the price of gas for the population will also be reviewed and the purchasing price of gas Naftogazom from its subsidiary company Ukrhazvydobuvannia.

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