Roman Storozhev: the Law "On the natural gas market" opens up opportunities for further liberalization of the sector and reforms
April 14, 2015
The draft law "On the Natural Gas Market" provides opportunities for reform and liberalization of the sector. This was possible due to the fact that the normative document was based on the best and progressive European practice of the regulation of energy markets, and its provisions consistent with the principles of the EU Third Energy Package and the obligations of Ukraine within the framework of the Energy Community. This was stated by President of the Association "Subsoil users of Ukraine" Roman Storozhev.
For mining companies adopting this legislation is of paramount importance: in accordance with the norms of the bill №2250, should be established wholesale gas market with a system of bilateral agreements and the system of financial guarantees, based on the principle of freedom of contract. "Mining companies are ready to transition to the principles of open competition, non-discriminatory, market pricing, and most importantly, legally guaranteed principle of non-interference in the activities of economic entities of natural gas market. Therefore, it is important that certain norms fixed one of the functions of the independent regulator of the market: guaranteeing the right of freedom of contract on the sale or supply of natural gas, as well as the monitoring procedure provided for the emergence of contractual practices that restrict competition in the market, and a mechanism to address them, "- explains Roman Storozhev.
According to the subsoil users, a competitive relationship in the "point of sale" or exchanges later, will allow market forces to determine the price of natural gas in the domestic market, offer quality related services to the consumers. Single price for natural gas for all categories of consumers will enable the mining industry - both private and public companies - to develop according to their own business strategies, investment opportunities, and not in accordance with the requirement to provide cheap gas for individual consumers. And in the context of bringing the prices for all categories of consumers to the market level should be noted several facts:
- As soon as earn a full market price is not high, but reflect the actual cost, taking into account the investment component;
- Triggered mechanism of energy saving that in the long term should mean reliable accounting of natural gas consumed by all categories of consumers, without exception, and free choice of the necessary resources at an affordable price;
- All of the state budget funds that were previously sent to cover the deficit of "Naftogaz of Ukraine", now can and should be focused on providing targeted subsidies to the population. In addition, this article further state budget expenditures will be financed by taxes, which will increase in direct proportion to the increase in production volumes.
Thus, the introduction of market mechanisms able to address not only the gas sector, but also provide a solution to the state of social issues, such as subsidization of tariffs for vulnerable consumers. And the proposed legislation is a more efficient mechanism, proven in other European countries, not kvazi funding as cross-subsidization, which made the energy sector - one of the most promising businesses in the world - in the subsidized segment of the Ukrainian state budget.
Adoption of the bill has already praised the Ukrainian partners from the EU and noted that from this moment begins the process of implementation of all the provisions laid down in the document and begins the process of reforming the energy sector on the principle of open markets of natural gas for all consumers and suppliers, wholesalers and wholesalers Energy Community, the removal of restrictions to natural gas trade between the two countries - parties ES and greater integration of national markets.
As a result, the new model of the gas market of Ukraine, proposed to introduce a new bill will have to provide real choice to all its customers, create new business opportunities and increase cross-border trade in order to achieve efficiency gains, competitive prices, better service, and to improve energy security and stabilize the economy of Ukraine.
April 14, 2015
oil-gas-energy.com.ua