The Ukrainian government has decided to cancel reduced prices of natural gas for households and set a single market price from May 1, 2016, at the level of a purchasing price of imported gas, according to a Cabinet resolution dated April 27, 2016.
The single price is fixed at UAH 6,878 ($275) per 1,000 cubic meters.
The new price consists of the price of imported gas with costs of delivery to the Western border (UAH 4,942 per 1,000 cubic meters), value added tax (UAH 1,147 per 1,000 cubic meters), costs of transportation inside Ukraine (UAH 219 per 1,000 cubic meters), gas distribution costs (UAH 513.7 per 1,000 cubic meters), and regional gas distribution companies` commission (UAH 57.4 per 1,000 cubic meters).
Earlier, during the heating season, some households in Ukraine were able to pay for the consumption of up to 200 cubic meters of gas per month UAH 3,600 hryvnia (about $144) per 1,000 cubic meters of gas. When consuming large volumes of gas, the price was UAH 7,200 (about $288) per 1,000 cubic meters.
Ukrainian President Petro Poroshenko described the decision to introduce the single price as a serious anti-corruption measure.
Ukrainian Prime Minister Volodymyr Groysman said that the decision was uneasy and could trigger broad debates in the public, but it would let Ukraine get rid of all existing schemes that allowed earnings on a difference in gas tariffs.
At the same time, the Cabinet additionally allocated UAH 5.3 billion for subsidies this year to cover the subsidies recipients will have in connection with the introduction of the single price of gas. Thus, gas subsidies in 2016 will exceed UAH 40 billion. The Ukrainian government says that the amount will be enough to cover low-income households` gas costs.
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