Naftogaz trying to receive rules for compensation under PSO from govt to finish market reform

National joint-stock company Naftogaz Ukrainy is trying to receive the rules for compensating public service obligations (PSO) for supplies of gas from the Cabinet of Ministers of Ukraine to finish the process of reforming the natural gas market, Naftogaz has said on its Facebook page.

Earlier, on July 19, Kyiv's district administrative court under Naftogaz Ukrainy's claim obliged the Cabinet of Ministers to accomplish Part 7 of Paragraph 4 of Article 11 of the law on the natural gas market and determine the sources of financing, the rules for setting compensation for natural gas market players with PSO via amending government resolution No. 187 dated March 22, 2017.

"If Ukraine conducts the market reform using the European example, then it is necessary to draw up this order and meet all other conditions aiming to demonopolize the gas market for the population. If it does not [conduct the reform], consumers will have a reasonable question: why did they start all these? Prices were raised, and where is the choice?" Naftogaz said.

Nafotgaz recalled that the European legislation, according to which the Ukrainian gas market law is adopted, gives the governments the right to temporarily impose the obligation to sell gas to certain groups on special terms on market participants. At the same time, the government should compensate for the costs associated with fulfilling these obligations, which allows to maintain competition in this market segment and ensures the responsibility of the authorities for implementing non-market restrictions and interference in the work of the market.

Naftogaz draws attention to the fact that in the current situation large international companies continue to enter the commercial consumers' gas market in Ukraine, and the structures controlled by Dmytro Firtash continue to occupy a significant share of the household gas market.

Failure to comply with some requirements of the law distorts incentives for competition and closes the access of alternative suppliers to consumers, Nafotgaz said.