Naftogaz will create a fixed-rate gas payment plan in April that protects household consumers from seasonal spikes in gas prices during the next heating season, the country’s leading gas producer announced on March 25.
Under the new plan, gas prices will remain fixed throughout the year and consumers’ bills will only vary based on how much gas they used. All customers will be transitioned to the fixed-rate annual plan by default starting in May. All gas supply companies will offer an annual fixed-rate payment plan, according to Naftogaz.
Consumers will be able to switch back to the monthly plan at will. Changing one’s household gas supplier is also possible at any time.
Naftogaz was the first Ukrainian gas supplier to introduce an annual plan in August 2020 but suspended it in January 2021 due to a lack of demand from consumers.
However, Naftogaz’s clients who have signed up for its annual plan last year are continuing to pay fixed rates ranging from Hr 4.7 (17 cents) to Hr 6.45 (23 cents) per cubic meter. This is cheaper than the company’s April price for its regular clients — Hr 6.86 (25 cents) per cubic meter.
“The benefits of the annual tariff and its flexibility have already been appreciated by clients of Naftogaz,” said Andriy Kobolyev, the CEO of Naftogaz.
The new annual fixed rates will be unveiled on April 25, Interfax-Ukraine reported. Naftogaz has already signed its first major contract for the purchase and sale of natural gas with major supplier JE ENERGY earlier in the week.
Artem Kompan, the director of JE ENERGY, says that the contract creates “healthy competition between suppliers,” incentivizing them to improve their services or offer more reasonable fixed rates to attract consumers.
“The annual contract is insurance against possible price increases during the next heating season,” Kompan told the Kyiv Post.
The businessman says that Ukrainians will be able to manage housing and utility costs better when gas prices are “more predictable,” and it also makes it easier for the state to plan the costs of subsidies and benefits for vulnerable populations.
Long-term contracts will also benefit natural gas producers, ensuring that their gas will be purchased, Kompan said. This allows them to estimate profits and plan their investments accordingly.
“Long-term contracts between market participants provide more predictability and stabilize the situation on the domestic gas market,” the director said.
