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“CHEAP GAS” AND PHANTOMS OR WHY THE GAS SHOULD BE MORE EXPENSIVE?

The relatively low cost of gas production is a consequence of the fact that mainly old wells are used for it. The low price of gas and the lack of market prevented the development of domestic gas production –lacking investment funds for many years gradually contributed to the obsolescence, wear and tear of assets of the sector. And private investors had no interest in the development of gas production in Ukraine.

The differentiation of gas prices always was, and still is, the “good soil” for the machinations of individual companies and the enrichment of the oligarchs. Gas that is supposed to be for the population and has lower price can be written off for “phantoms” or production losses, and then sold at a market price to industrial enterprises. In addition, the development of a full-fledged gas market in Ukraine is an urgent need for providing transparency and investment attractiveness of the sector.

And on the basis of such arguments, the price of gas cannot remain “non-marketable”. However, what about justice? The solution is simple – to combine increase of prices and social security.

Андріан Прокіп, експерт програми «Енергетика» аналітичного центру «Український інститут майбутнього» для opinion.

Inna Gordienko

PR-director of the Ukrainian Institute of the Future

+380 44 537-17-78

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