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EU demands explanations over Ukraine’s decision to suspend open gas market

“We were surprised by this non-transparent and non-reasoned measure," the European Energy Community Secretariat head Janez Kopac said

© EPA/SERGEI KOZLOV

KIEV, November 17. /TASS/. The European Energy Community is requesting explanations about the Ukrainian government’s decision obliging local enterprises to purchase natural gas only from national energy company Naftogaz, the Community’s Secretariat said on its website on Monday.

“In a recently adopted decree, the Cabinet of Ministers reintroduced the legal monopoly of the state-owned Naftogaz of Ukraine over gas imports and supply in the country without providing a proper explanation of the reasons for such detrimental intervention in the market. The decree is valid until 28 February 2015,” the Secretariat said.

In a letter sent to Ukrainian Prime Minister Arseniy Yatsenyuk on Monday, Secretariat head Janez Kopac requested to provide the Secretariat “with an explanation for the measures taken not later than 20 November 2014,” saying the decree raised “serious concerns in terms of its compliance with the Energy Community Treaty.”

“We were surprised by this non-transparent and non-reasoned measure. The creation of an open and liberalized gas market is one of the fundamental principles of the Energy Community,” Kopac said. “Despite its provisional nature, this Decree has exactly the opposite effect and sends a bad signal in terms of market reform.”

Ukrainian government resolution No. 596 on natural gas purchases by industrial enterprises and heat and power generating companies came into effect on November 12 and obliges about 80 major enterprises to purchase natural gas solely from Naftogaz from December 1, 2014 to February 28, 2015. “Natural gas purchase from other supplies is prohibited,” the Ukrainian government warned.

The government resolution also says that gas distribution and transportation companies are allowed to transport natural gas “only using the resources of Naftogaz."

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