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Ukrainian regional gas companies in 2017 doubled to UAH 20.4 billion (US$714.8 million) their debts for purchased natural gas before the national oil and gas holding Naftogaz of Ukraine, according to the holding's press service.
"As of January 9, 2018, these companies’ debt totaled UAH 20.4 billion (excluding gas supplied in December), having doubled over the last 12 months," it said.
Naftogaz will publish weekly data on the regional gas companies' debts to avoid further uncontrolled growth of arrears, the press service added.
The holding also expressed concern about the current procedure for calculating gas, which is provided to the regional gas companies with further supply to end-users, the recipients of benefits and subsidies.
According to the legislation that has been in force since the beginning of 2018, regional gas companies receive exclusively from Naftogaz natural gas to be forwarded to said categories of consumers. At the same time, the law allows them to use part of the money received from consumers, including payments from the state budget, which were allocated to vulnerable population groups, to pay for gas purchased from other wholesale suppliers (other than Naftogaz).
"According to the new rules, we are obliged to supply gas [to regional gas companies], which will be able to use the money received for handling their accounts with other companies. This is not monetization but an opportunity to siphon assets from both Naftogaz and Ukraine's national budget," the press service quoted Naftogaz CEO Andriy Kobolyev as saying.
As reported, the growth of the regional companies' debts will lead to a worsening of Naftogaz's financial performance and a reduction in the holding's payments to the state budget.
As UNIAN reported earlier, in late May 2017, Naftogaz Chief Commercial Officer Yuriy Vitrenko stated that the debt of regional gas companies reached US$1 billion.
In early April, the state-owned holding published its appeal to the government, Ukraine's National Energy and Utilities Regulation Commission (NEURC), and the Antimonopoly Committee to eliminate the unwarranted monopoly of the international group of companies, Group DF, owned by Ukrainian businessman Dmytro Firtash. Group DF holds a significant share in the market for distribution and supply of gas to households. According to Naftogaz, most regional gas distribution companies are unnecessary intermediaries on gas market, bearing no responsibility and risks associated with gas supplies, as well as creating no added value for consumers.
In response to Naftogaz's statements, the Gas Market Association (representing the regional gas companies' interests) said that the regional companies' debts before the state holding are related to the fact that the state does not fully cover benefit and subsidy payments for households, rather than to their shortcomings