The debt crisis in the natural gas market needs to be resolved immediately

08/ 09/ 2020

This was discussed during an open meeting of the EBA Energy Committee Debt crisis on the natural gas market - the economic aspect of the solution. During the meeting, there was a discussion of the best ways to solve the problem of accumulated debt on the natural gas market among its participants. The debts of UAH 100 billion incurred by natural gas market participants have become critical and need to be settled by the state. During the meeting, it was confirmed that there is such a significant amount of debt. Thus, it is agreed that the issue should be resolved promptly and by consensus. It is important to emphasize that the debts in question are not the debts of the population. These debts have never been exposed to the population; they were formed among the market participants due to shortcomings in government regulation of previous periods. We would like to recall the main reasons that led to the current accumulation of debt on the gas market: · Miscalculations in government decisions of previous years, particularly the establishment of unreasonable norms of gas consumption and the ban on billing consumers for gas volumes, reduced to standard conditions; · Economically unreasonable tariffs for heat producers for the population, which do not cover the costs of its production; · Economically unreasonable tariffs for gas distribution network operators. According to the deputies of Ukraine Oleksiy Kucherenko and Serhiy Nagornyak, the Verkhovna Rada Committee on Energy, Housing, and Utilities Service will take this issue for consideration in the near future. The participants of the meeting covered in detail the problematic issues of the debt accumulation by the market participants and possible options for resolving the debt crisis. It is especially important to provide mechanisms to prevent the accumulation of debts in the future, as well as to correct the consequences of miscalculations in government decisions of previous periods. It is also necessary to conduct a full audit of existing debts providing a subsequent solution for the debt relief. The EBA Energy Committee hopes that the issue of accumulated debt will be resolved by providing the market participants with transparent, balanced, and compromising tools that will further the effective development and functioning of the natural gas market. For the reference: The meeting took place on September 3, 2020, with the participation of deputies of Ukraine, representatives of the Government, GTS operators, gas distribution network operators, heat supply and heat-generating organizations (DH), gas enterprises, and market experts. Currently, the Verkhovna Rada has registered two draft laws № 3800 and 3800-1aimed at resolving the problem of current debt and ensuring the financial stability of the market, as well as the draft law №3896 designed to regulate tax aspects. Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.

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This was discussed during an open meeting of the EBA Energy Committee “Debt crisis on the natural gas market – the economic aspect of the solution.” During the meeting, there was a discussion of the best ways to solve the problem of accumulated debt on the natural gas market among its participants.

The debts of UAH 100 billion incurred by natural gas market participants have become critical and need to be settled by the state. During the meeting, it was confirmed that there is such a significant amount of debt. Thus, it is agreed that the issue should be resolved promptly and by consensus.

It is important to emphasize that the debts in question are not the debts of the population. These debts have never been exposed to the population; they were formed among the market participants due to shortcomings in government regulation of previous periods. We would like to recall the main reasons that led to the current accumulation of debt on the gas market:

· Miscalculations in government decisions of previous years, particularly the establishment of unreasonable norms of gas consumption and the ban on billing consumers for gas volumes, reduced to standard conditions;

· Economically unreasonable tariffs for heat producers for the population, which do not cover the costs of its production;

· Economically unreasonable tariffs for gas distribution network operators.

According to the deputies of Ukraine Oleksiy Kucherenko and Serhiy Nagornyak, the Verkhovna Rada Committee on Energy, Housing, and Utilities Service will take this issue for consideration in the near future.

The participants of the meeting covered in detail the problematic issues of the debt accumulation by the market participants and possible options for resolving the debt crisis. It is especially important to provide mechanisms to prevent the accumulation of debts in the future, as well as to correct the consequences of miscalculations in government decisions of previous periods. It is also necessary to conduct a full audit of existing debts providing a subsequent solution for the debt relief.

The EBA Energy Committee hopes that the issue of accumulated debt will be resolved by providing the market participants with transparent, balanced, and compromising tools that will further the effective development and functioning of the natural gas market.

For the reference:

The meeting took place on September 3, 2020, with the participation of deputies of Ukraine, representatives of the Government, GTS operators, gas distribution network operators, heat supply and heat-generating organizations (DH), gas enterprises, and market experts.

Currently, the Verkhovna Rada has registered two draft laws № 3800 and 3800-1aimed at resolving the problem of current debt and ensuring the financial stability of the market, as well as the draft law №3896 designed to regulate tax aspects.

Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.