After having his tenure extended for one year, Andriy Kobolyev, head of Ukraine’s state oil and gas monopoly, is again facing threats of being fired or forced to resign.
During an April 17 meeting of the Cabinet of Ministers, Prime Minister Volodymyr Groysman stated that would like to see gas prices for domestic consumers set under Hr 8.55 ($0.32) per cubic meter as soon as May 1.
Otherwise he will “initiate the resignation of the head of Naftogaz,” Groysman said. However, Naftogaz was quick to answer and divert the blame back on Groysman on April 19.
According to Naftogaz, the rise in gas prices was actually due to a government regulation on special duties that will essentially force the state gas company to increase its prices by 15 percent on May 1.
Naftogaz also declared that it appealed to the Cabinet of Ministers on April 9 to cancel the regulation on imposing special duties taxes so that they could reduce gas prices.
Reducing gas prices though goes against the requirements of the International Monetary Fund as agreed in Oct. 2018 and approved by the Ukrainian Parliament on Nov. 23.
The parliament agreed to a set of measures then – such as raising household gas tariffs by 23.5 percent – in the hope to receive the first tranche of a new 14-month, $3.9-billion agreement with the IMF in December.
The Ukrainian government indeed received 1 billion special drawing rights — roughly $1.4 billion — as part of a Stand-By Arrangement, on Dec. 18.
After several tense weeks that cast doubt over Kobolyev’s Naftogaz contract renewal, Groysman finally announced the extension of the contract on March 20, but his salary was cut in half to $450,000 under the new arrangement. His bonus package was also cut.
Soon after, Kobolyev was also removed from heading supervisory board of Ukrnafta and replaced by Yuriy Vitrenko, the business development director of Naftogaz.
He declared that his top priorities this year would be to eliminate gas market intermediaries, increase gas production and Naftogaz’s revenue, unbundle Ukraine’s massive gas transmission network to stimulate a competitive market, and help the nation become self-sufficient in energy.
