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In Ukraine, dozens of suppliers announced in February that they had decided to cut gasoline prices in January. In fact, the restriction “no more than 6.99 UAH per cubic meter”, which should have been in force since February, came into force retroactively.
Read about whether such a price change violates current rules and how much we will pay for gas in the OBOZREVATEL article.
Why have the rates been reduced?
This is where opinions differ. For example, Olga Babiy, a member of the National Commission for Energy and Public Services (NKREKU), says that it is normal market competition. They say that, according to the rules, by the 25th of the current month, the supplier must announce the “maximum expected price” for the next, and if it turns out that there is an opportunity to reduce the price, he can. that.
“I don’t see a retroactive price adjustment here. There is competition in the gas market, the consumer can choose who to buy from. If they have to choose between lowering the price or losing the customer, the suppliers have chosen to lower the price … Gas is just a commodity now. Yes, the monopolists wanted to have a high price. But excess profits are wrong under current conditions. If the supplier does not want to reduce the price, the consumer will simply drop it.“, – says Babiy.
You can read more about changing providers here. Coordinator of housing and energy programs “Opory” Tatiana Boyko is sure that this is a political decision, that is accepted under pressure and does not meet market conditions.
“I don’t know what happened, we can definitely say that this is a political decision. First, the gas sales – daughters of the RGK group companies and a few more sales, and then the Naftogaz gas supply company, and then a series of other companies obviously reaction to the situation so as not to lose customers. This is beyond the market rules. Probably consumers will like it, but for the market it is a very dangerous signal “, – said specialist OBOZREVATEL.
How much will we pay in January now?
For example, in Khmelnytsky, a family using local gas sales services was supposed to receive a payment for the 500 cubic meters used of 4.95 thousand UAH (9.9 UAH per cubic meter), but under the new rules they will pay only 3.49 thousand UAH (the fee was reduced to UAH 6.99).
It should be noted that the Cabinet of Ministers did not begin to limit gas prices retroactively. Then the Ministry of Energy explained that it is legally difficult to do this. However, the providers decided to take that step of their own free will.
According to the new rules, which are valid until the end of the heating season, the tariff cannot exceed 6.99 UAH, but it can be lower. The company Megawatt offered a price of 6.88, Agrosintez Trading – 6.88, Energy Resources of Ukraine – 6.90.
Now can they also raise the price after the fact?
NKREKU assures: the price can only be reduced. Like, the figure that was announced on the 25th of last month is the maximum. You cannot offer a higher price, otherwise the rules will be broken and then the regulator will have to intervene.
Tatiana Boyko believes that the very act of reducing prices retroactively is bad practice. First, according to the expert, it will show that the rules can be violated, and secondly, it will add arguments to the populists, who previously argued that gas could be cheaper, but the suppliers simply decided to cash in on the Ukrainians.
What will the price be before the end of winter?
Market restrictions are in effect in Ukraine until April. No one can sell gas at a price higher than 6.99 UAH per cubic meter. Those looking to attract a consumer offer a lower cost. However, after April, the government should not control the cost of a cubic meter.
The only innovation that officials promise to develop is to force all market participants to offer annual prices (they will be more profitable than monthly prices). An option is also being considered to automatically transfer all Ukrainians at the annual rate, if they themselves did not want to stay at the monthly rate.
Here too there is a risk. If it is not profitable for the provider to make a low annual fee, it may overestimate it, formally meeting the requirements. The gas market in Ukraine for ordinary families has been fully operational since August 2020. Any consumer can submit an application in a matter of minutes and change blue fuel supplier, and at the same time their rate.
However, so far less than 10% of Ukrainians have decided to take that step. The rest, as before, purchase gas sales at the price offered. And if the tariff increases sharply, instead of changing providers (and this could save around 30%), the Ukrainians are going to protest and block the streets. Although, to pay significantly less for gas, you just need to understand the market rules and efficient energy consumption.
