Govt rejects Ukrtransgaz's financial plan over provisions govt earlier approved for Naftogaz's plan

The governmental committee has rejected a financial plan of public joint-stock company Ukrtransgaz over the provisions which the Cabinet of Ministers earlier approved for the financial plan of national joint-stock company Naftogaz Ukrainy, Chief Commercial Director of Naftogaz Yuriy Vitrenko has said.

"The government approves the financial plan of Naftogaz Ukrainy with a transaction on the sale of buffer gas, while it does not approve the financial plan for Ukrtransgaz, as it reflects the transaction to buy this buffer gas… This is a bright example of why the supervisory board, not the Cabinet, must approve the financial plan – a consolidated plan, not financial plans of separate enterprises of the Naftogaz group," he wrote on his Facebook page.

Vitrenko explained that around 5 billion cubic meters (bcm) of gas is used as buffer gas in underground storage facilities of Ukrtransgaz. This volume cannot be supplied to consumers, and from the point of financial reporting standards, it must be taken into account as fixed assets, not as a commodity. The sale and purchase transaction from Naftogaz to Ukrtransgaz was the reason why the financial plan of the operator of the Ukrainian gas transport system was rejected by the government.