In addition, bearing in mind the most likely launch of Nord Stream 2 and the risk of reducing or completely stopping the transit of Russian gas through Ukraine, this will significantly weaken the energy security of our country. At the same time, the cessation of investment activity will logically lead to an annual fall in gas production, reduction of taxes in state and local budgets, reduction of jobs in the sector and related industries. According to the results of 2021, independent companies will produce 5 bcm of natural gas, which will be more than a quarter of all production in the country and will be an absolute record. Thus, over the past 5 years, private gas companies have increased natural gas production by more than 20%. Non-market mechanisms and emotional decisions won’t help to resolve the energy crisis in Ukraine, but on the contrary, will deepen it even more and lead to even greater import dependence in the future. Instead, the government is there to support the population and business: it provides benefits and subsidies to vulnerable households from the state budget, temporarily reduces taxes for companies and introduces one-time payments to consumers. The experience of leading European countries that have also faced the energy crisis shows that they do not interfere in the functioning of the natural gas market and do not abandon competitive pricing.
The use of such non-market mechanisms of state price regulation will mean Ukraine’s renunciation of its international obligations to create a single gas market, including the Treaty establishing the Energy Community and the Association Agreement, as well as the refusal to further implement a number of energy legislation of Energy Community in the energy sector. State control over the price of natural gas sales not only does not solve consumer problems but will also have catastrophic consequences for Ukraine’s energy sector.
1435 of December 30, 2021, adopted by the Cabinet of Ministers of Ukraine are illegal and contradict the current legislation, in particular, the Law of Ukraine ‘On Natural Gas Market’, as they provide that from January 1 to April 30, 2022, inclusive, private gas companies will be obliged to sell 20% of the produced gas on the commodity exchange at a regulated price every month. The Association of Gas Producers of Ukraine, which unites leading both state-owned and private companies, draws the attention of the President of Ukraine, the government, MPs and the public to threats of state interference in regulating the price of natural gas produced by private companies.
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