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Why does Naftogaz seek to conceal price of reverse gas from Europe?

Naftogaz CEO Andriy Kobolev. Photo: podrobnosti.ua

Naftogaz of Ukraine suggests classifying the price of the reverse gas from Europe to hush up the huge overpayments and failures of the company’s leadership, experts say. To recall, Naftogaz of Ukraine requested the parliament to classify the price condition of the contract on purchase of natural gas from European suppliers. The national company explains its request saying open data on the gas price may result in a price hike for Ukrainian consumers. According to the company press office, the open data will affect the price proposals and part of suppliers may refuse to deal with Kiev over information sensitivity. By data of Naftogaz of Ukraine, European suppliers say disclosure of such sensitive commercial information is unprecedented for the European market and is not a requirement in the EU countries. In fact, Ukraine has a law on access to public information and compelling disclosure of information on contract cost, cost per unit of purchased goods, the quantity of goods and services. However, experts say, Naftogaz of Ukraine never publishes data of contracts and prices per contractor.

“First, no one knows who the contractors are. Second, only aggregate price is published and it is impossible to compare the price and the volume,” says Valentin Zemlyansky, Director of Energy Programs, Center for World Economy and International Relations, National Academy of Science, Ukraine.

Co-Chair of Ukraine’s Fund for Energy Strategies Dmitry Marunich says Naftogaz of Ukraine publishes only selected average purchase price for reverse gas. “Therefore, it is an attempt to stop leakage of information even on average prices from other sources having access to contracts, for instance, from the Ministry of Economic Development,” the expert says. As EADaily reported earlier, in January, the ministry reported that in December Ukraine imported gas from Europe for $230 per 1,000 cubic meters.

“The Ukrainian company is keen to classify the price of the reverse gas, which is awkward, given that it is very favorable for Ukraine to speak about inexpensive European gas, while it would be deadly for it to disclose how much it costs in fact,” says Alexey Grivach, Deputy Director General of the National Energy Security Foundation. He thinks that the idea of Naftogaz of Ukraine to classify the gas price shows that Kiev has much to conceal from the people.

“There is also Stockholm Arbitration that considers mutual claims of Gazprom and Naftogaz, including the gas price appropriateness. It is impossible to conceal that information from judges. Actually, Ukraine’s state concern pays European traders a much higher price and deliberately fails to implement its contract commitments with Gazprom without real non-political reasons,” Grivach says.

Valentin Zemlyansky, Director of Energy Programs, Center for World Economy and International Relations, National Academy of Science, Ukraine, says the leadership of Naftogaz of Ukraine may have two more reasons to classify the prices.

“One of the reasons is to conceal the contract calculations (with European suppliers – editor’s note) like it was in the Q2 and Q3 of the last year. They anticipated price reduction, but, in fact, they missed the chance to buy cheaper gas from EU to pump in into underground gasholders,” Zemlyansky says. “The other reason is the soaring prices of the imported gas. Perhaps, Naftogaz will raise the gas price for the population after heating season. It will be easier to explain the price hike with the import price growth and do not disclose the real price for state secrecy.”

To recall, EADaily has repeatedly addressed the issue reporting that Naftogaz of Ukraine overpays for the reverse gas – it is mostly the Russian natural gas that European suppliers resell to Ukraine.

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