The gas price for Ukraine will not be pegged to quotations of crude oil / Photo from UNIAN
Naftogaz of Ukraine CEO Andriy Kobolev has announced that the Arbitration Institute of the Stockholm Chamber of Commerce has ruled that the price of natural gas Ukraine bought from Russia's gas giant Gazprom at in 2011-2015 should be reviewed retroactively, and ordered that the review should cover the period starting from 2014.
"We insisted that the price should be reviewed retroactively beginning from 2010. The Arbitration Institute decided that the review should concern the period from 2014," Kobolev said on TV on Monday, June 5, commenting on the ruling.
Kobolev said that the decision was based on the activity of Naftogaz and the Ukrainian government in 2010-2014.
Read alsoUkraine starts recovering Gazprom assets following court rulings"The period determined by the arbitration for the review of the price for Naftogaz was to a greater extent defined by the actions undertaken by Naftogaz's management and the Ukrainian leaders in 2010-2014 under this contract and in relation for the price which gas was imported at from Russia," he said.
He also said that the reviewed price is lower than the one Ukraine now imports gas at from the European Union.
"The formula has been drastically changed. It has been switched over to a new, market-oriented principle. It [the price of gas set in keeping with the new formula] is lower than the price Gazprom insists on… It is lower than the price Ukraine pays for the gas we now buy on the European market. The formula we've got now is the lowest price out of all the possible prices of gas on the Ukrainian market," he said.
According to Kobolev, the new gas price formula will not be pegged to quotations of crude oil, as it was before, as it will be based on market indicators on the gas market.
"The formula of the price was immediately changed for Ukraine: from pegging to crude oil [oil prices in the world] to pegging to the market. Previously, we had 100% of crude oil, now it is 100% of the [gas quote] market... In our invincible belief, pegging to the market by 100% is the fairest and more efficient," he added.
UNIAN's memo. The Arbitration Institute of the Stockholm Chamber of Commerce has been considering the claims filed by Naftogaz on behalf of Ukraine against Russia's Gazprom regarding the transit of Russian gas to the EU through Ukraine and the purchase of Russian gas by Ukraine.
Read alsoStockholm arbitration rejects Gazprom's "take-or-pay" demands to NaftogazOn June 1, it became known that the Arbitration Institute had satisfied Naftogaz's claim to review the price under the 2009 gas purchase contract with Gazprom, taking into account market conditions.
Also, there was a separate ruling to cancel Gazprom's "take or pay" rule, according to which Ukraine was either to buy 52 billion cubic meters of gas every year or pay the price of it even if not the entire contracted volume was bought.
In addition, Gazprom's ban on gas resale was lifted.