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Naftogaz Ukrainy to raise retail prices for household gas by 50% on May 1

The prices will keep rising steadily until 2018

KIEV, March 26. /ITAR-TASS/. Naftogaz Ukrainy is planning a more than 50% increase in consumer prices for household gas as of May 1, 2014, a company representative cited by Reuters said on Wednesday.

The prices will keep rising steadily until 2018.

Yuriy Prodan, Ukraine’s parliament-appointed Minister of Energy and Coal Industry, has recently said that Ukraine was not officially notified that it no longer had a discount in the price it paid for Russian gas under the 2010 Kharkov agreements.

Prodan warned Ukraine could face risks linked to cuts in gas supplies to Ukraine and a considerable hike in prices for the gas which Ukraine receives from Russia.

According to Prodan, Ukraine’s underground storages have about 7 billion cubic meters of gas.

Meanwhile, Russian president’s spokesperson Dmitry Peskov said the same day that Ukraine could hardly count on discount in the price for Russian gas because the Russian Black Sea fleet based in Crimea was no longer on Ukrainian territory and there were no legal grounds for giving Ukraine a discount;  besides, Ukraine has failed to pay on its debts.

The transition of Crimea and Sevastopol under Russia’s jurisdiction has made the subject of the Kharkov agreements, which Russia and Ukraine signed on April 21, 2010, irrelevant.  As a result, Kiev’s sovereign debt to Moscow is expected to run up to almost $11 billion dollars. This is exactly the size of the gas discount which Russia granted to Ukraine in accordance with the Kharkov agreements.

The money which the Russian budget lost as a result of this discount was supposed to have been spent on paying for the Russian Black Sea fleet’s presence in Ukraine from 2017 to 2042.