The government could slash gas prices by two to four times, as long as this doesn’t contradict the requirements of the International Monetary Fund and the European Union Ukrainian, Prime Minister Volodymyr Groysman said at the Ukrainian Energy Forum in Kyiv on Feb. 26.
But such a decrease in prices is unlikely, fired back Olga Bielkova, the head of the Ukrainian parliament’s energy committee.
Groysman and Bielkova were speaking in front of a plenary session of the forum on the new era of natural gas exploration and production in Ukraine. Groysman called on the participants, also including Deputy Prime Minister Volodymyr Kistion and Energy Minister Ihor Nasalyk, to figure out a way for Ukraine to lower gas prices by up to four times “without causing an economic crisis.”
“I ask you, as professionals, to discuss this topic, and I’m quite sure that if you find a decision… I will take it upon myself to realize it literally tomorrow,” Groysman said.
However, when it was Bielkova’s turn to speak, she said “I don’t believe this is possible. Such a price (a twofold to fourfold decrease) cannot be in Ukraine.”
Reducing gas prices has been a popular promise among candidates running in the presidential election scheduled for March 31. For example, ex-Prime Minister Yulia Tymoshenko, who is also leader of the Batkivshchyna Party with 20 seats in parliament, has famously promised to halve gas prices for households within 30 days of her inauguration as president. Oleh Lyashko, the leader of the 21-member Radical Party who is also running for president, has made similar populist promises as well.
If there is a potential for reduction of gas costs, it must have to come through expanding the production of Ukrainian gas, which would be cheaper than importing it from abroad, Bielkova said. She added that while it’s possible to subsidize small amounts of gas for the poorest Ukrainians, politicians who promise to halve the gas costs are not being truthful.
“Let’s be frank, for the implementation of market conditions, several categories of consumers will see certain increases in price,” she said.
Groysman in turn had criticism for Naftogaz, saying he was “disappointed” that the state enterprise didn’t fulfill its plans to increase gas production by 2020.
“I think that it (takes advantage of) its monopolistic position, and technologically it lags behind participants from the private sector,” said Groysman. “But I’m convinced that we will find ways for the national gas production company to be effective and achieve the goals and overcome the challenges that stand before us.”
Andriy Kobolyev, the CEO of Naftogaz, was nowhere to be seen at the forum, even though he was expected to attend.
Kobolyev had told the Kyiv Post in an interview earlier this month that he fears the “darkest times” are returning for Naftogaz, even after all the state company has managed to accomplish. Political demands undermine the authority of Naftogaz’s supervisory board, according to the CEO.
Kobolyev is under pressure from many sides, including from Groysman, who on Jan. 16 demanded a new contract for Kobolyev with lower pay. Kobolyev said that renegotiating his contract, slated to end on March 22, should be the board’s decision and not the prime minister’s.
