UNIAN
Ukraine’s largest state-owned oil and gas company, Ukrgasvydobuvannya, has said that to improve the company’s financial standing it should be given the opportunity to sell the gas it extracts, now sold exclusively through Naftogaz Ukrainy, directly to the population.
This was stated by the head of planning and economic department at Ukrgazvydobuvannya, Oleksiy Bilichenko. He said that with the current financing volumes the company is not able to increase gas production.
He also noted that the company has no leverage to manage its liquidity.
According to him, until April 1 of this year, the company was selling gas at UAH 349 per thousand cubic meters without VAT. However, even at such a low price, Naftogaz built up debt to the company in 2013 of UAH 2.2 billion.
At the same time, he said that starting from April 1 the selling price of gas has grown to UAH 1,590, against rising costs due to the weaker hryvnia and rising inflation in the country.
However, the representative of the state company predicts the company’s situation may worsen even after the increase in the sales price of the gas.
"Naftogaz won’t receive payments from the population at a higher price in the summer and early autumn due to reduced gas consumption in this period, and we will not be paid, or will get around UAH 349 once taxes are paid on the UAH 1,590 [price]," Bilichenko said.
According to him, with a production fee of 70%, the total tax payments of the company will increase by 4.5 times - to UAH 1.8 billion per month.
"If we paid about UAH 400-500 million in taxes before, after the tax increases starting from April we will have to pay about UAH 1.8 billion per month. Ukrgazvydobuyvannya will not have those funds. We will not have anything to invest in development, and, moreover, we will constantly be indebted to the budget," the company’s representative said.
According to him, high production fees will drain away the company’s funds, which otherwise could be channeled into investments.