Russia: Ukraine Should not Expect Gas Discounts

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September 16th, 2015

Rusvesna – translated for Fort Russ by Joaquin Flores

Additional discounts on gas for Ukraine for the winter is not being provided for, said the Russian Minister of Energy, Alexander Novak.

According to him, previously the European Commission (EC) had agreed to a formula for determining prices of gas for Ukraine, and additional discounts in excess of this formula are not provided.

After bilateral talks in Vienna with the EC, the Russian Energy Minister has said that a discount on the price of gas for Ukraine may not be definable if the price will be determined by local rates.  According to him, if the formula of the contract price will emerge at the local rates in Europe, prices generally will not change.

If the price is higher than the local price, the “delta” [a formulaic change is signified with a Greek ‘delta’, – .ed] will be aligned to the prices in Poland. While the price of Russian gas for the fourth quarter 2015 and first quarter of 2016 was set at $ 250 for 1 thousand  cubic meters.

However, the Ukrainian side, represented by the Minister of Energy and Coal Industry Volodymyr Demchishin claimed that by the formula the price is only $250 minus $30 – it is clear the discount will be seen by consumers in Ukraine.

In the third quarter of 2015, Ukraine refused to purchase Russian gas, considering the price from “Gazprom” as overpriced. The actual purchase of imported gas in Europe are on average $20-30 higher than the proposed “Gazprom” rate. 

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