Gas price for households may rise to UAH 5,43 per cubic meters

Photo: Konstantin Melnitskiy

National JSC Naftogaz Ukrainy has calculated the production costs of gas produced by its subsidiary, PJSC Ukrgazvydobuvannia, and determined that the economically feasible gas production cost in 2015 will be UAH 5,430, or $319.4 (at a forex rate of UAH 17 per U.S. dollar) per 1,000 cubic meters, zn.ua has reported.

The publication refers to an information note Naftogaz released at the request of the Energy and Coal Industry Ministry, and provided to zn.ua due to an editorial request.

The costs include operating costs (UAH 208 per 1,000 cubic meters without amortization and royalties included), administrative expenses (UAH 19.4 per 1,000) and other costs, in particular expenditures on seismic and scientific research, which amount to UAH 21.9 UAH per 1,000 cubic meters.

The costs also incorporate amortization costs of fixed assets (UAH 302.9 per 1,000 cubic meters) and amortized expenditures on the right to use subsoil (UAH 311 per 1,000 cubic meters).

Naftogaz also took into account the cost of capital, which according to its calculations is UAH 2,854.2 per 1,000 cubic meters. According to the information note, the cost of capital is equal to the income Ukrgazvydobuvannia could obtain from investing in alternative assets with a similar level of risk.

zn.ua writes that the gas produced by Ukrgazvydobuvannia is used for the needs of Ukrainian households. This gas covers about 70% of the population's demand for gas and thermal power. The remaining gas needed to meet households' demand is bought by Naftogaz abroad, at market prices.

The ceiling prices of natural gas for producers and consumers in Ukraine are set by the National Commission of Ukraine for Energy and Housing and Utilities Services Regulation (NCER).

The current gas price for households is between UAH 1,182 and UAH 4,011 per 1,000 cubic meters depending on the availability of gas meters and the level of consumption.

Source: Interfax-Ukraine