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With the arrival of the cold in Ukraine, gas prices for the population rise again. At Naftogaz, this is explained by the seasonal factor and an increase in the wholesale price of blue fuel.
The state-owned company Naftogaz of Ukraine increased the price of gas for the population in November by 35 percent at one time compared to October. In this regard, experts predict an increase in heating and hot water rates by 20-30 percent by the New Year. Correspondent.net says the details.
Gas goes up, heating goes up
Ukraine’s Naftogaz gas supply company reported that from November 2020, it will increase the cost of natural gas for the population by 34.7 percent.
As of November 1, the price per cubic meter of gas at the monthly rate will be 6.33 hryvnia including VAT and excluding the cost of gas delivery. In October, the price per cubic meter was 4.7 hryvnia.
Starting in November, the price of gas will also increase at an annual rate. Gas at an annual rate will cost 6.45 hryvnia per cubic meter. The increase amounted to 23 percent: in the October tariff, the price was set at 5.24 hryvnia.
Until the end of October, consumers have the right to set the annual price at 5.24 UAH, but there is very little time left for the successful implementation of this opportunity.
The regulator explains the increase in tariffs due to an increase in natural gas prices in Europe by 26 percent compared to September prices due to increased demand.
“However, thanks to the significant reserves in underground gas storage facilities in Ukraine, the price of gas for heat producers in October increased by 24 percent compared to last month,” Naftogaz stressed.
Following the launch of the gas market for the population, Naftogaz offered one of the lowest prices in an attempt to attract new customers. Before that, its share of the market for supplying gas directly to the population did not exceed two percent.
On the one hand, Naftogaz’s price changes directly affect only its customers, but on the other hand, other gas suppliers are guided by the state company and their prices are usually always higher.
Naftogaz eve also raised gas prices for heat producers: in October, the wholesale price was set at 5.37 hryvnia per cubic meter, which is 24.8 percent higher than the price of fuel blue in September.
Note that in September, Naftogaz increased the price of heating and power by 45 percent at a time compared to August. The figures for the heat producers are given without VAT and without gas transport costs through main and distribution pipes.
Heating and Power Gas Wholesale Prices
The cost of gas is one of the main components of the price of heat produced by teplokommunenergo companies (more than 80 percent).
Under the agreement with the IMF, a legislative requirement is being introduced in Ukraine that, as of October 1, allows heat supply companies to review rates several times a year, adjusting them according to gas market prices. . That is, the price of gas will increase, the price of heating and hot water will also increase.
In addition, the number of payments will increase due to the increase in the minimum wage from September 1: utilities will have to increase the cost of their employees’ salaries.
Former Naftogaz director for financial and investment affairs, Yaroslav Dikovitsky, says that 98 percent of the population will receive gas in November at an average price of 8.8 hryvnia per cubic meter, writes UBR.
Therefore, since the liberalization of the gas market in Ukraine for the population, the increase in prices of blue fuel will be 205 percent, from 2.88 hryvnia per cubic meter in July to 8.8 hryvnia in November.
Suppliers attribute this price to higher prices in centers in Europe, where they are purchased. During the past month, from September 25 to October 25, the daily quotations of the European TTF center increased by 32.8 percent.
For Teplokommunenergo companies, the special public obligations (PSO) mechanism was extended until May 2021, which should protect them from the arbitrariness of gas suppliers for at least the next heating season.
However, an increase in heating and hot water tariffs cannot yet be avoided, as JI’s calculation formula is linked to the price in Europe. Therefore, experts also predict an increase in rates.
“We should expect new heating rates for January 1, 20-30 percent higher than now,” says Oleg Popenko, director of the Union of Utilities Consumers.
The representative of the Association of Energy Suppliers Artem Kompan, in turn, says that the price of heat “will jump” every month.
He predicts that heating rates could increase by 15 to 16 percent. For example, if in October you have to pay about 1.1 thousand hryvnia to heat a one-room apartment, then in December a payment of 1.2-1.3 thousand will be made for the same apartment.
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