Government slashes prices of natural gas for households in Ukraine

The Cabinet of Ministers has fixed a price of natural gas at UAH 6.99, or US$0.25 per cubic meter for households in Ukraine as of February until the end of the heating season.

Prime Minister Denys Shmyhal made the announcement at a government meeting on Monday, January 18.

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"As per President Zelensky's instructions, the government has passed a resolution that caps the price of gas at UAH 6.99 per cubic meter. This price will be valid until the end of the heating season or until the end of [the coronavirus-related] quarantine. Suppliers will not be able to raise prices higher than UAH 6.99," he said.

Starting from February, the price of gas in the country will decrease by 30% on the average, while the price for most households will plunge even by 40%, he said.

"The decision to set the ceiling gas price does not mean that the government gives up plans to develop the gas market. But without intervention in the situation, the price of a cubic meter of gas could skyrocket to UAH 12 [US$0.43] as early as in February," Shmyhal said.

Natural gas price: Recent developments

• On January 1, 2021, a new price of natural gas was introduced in Ukraine; it was offered by gas suppliers as part of launching a competitive gas market.
• Gas suppliers' prices for households in Ukraine in January were set between UAH 6.99 (US$0.25) and UAH 10.8 (almost US$0.40) per cubic meter, while the minimum rate was 11% up and the maximum one was 20.5% up on the December quotation.
• On January 1, 2021, new tariffs for natural gas transportation were also introduced in Ukraine.
• The National Energy and Utilities Regulatory Commission of Ukraine (NEURC) increased tariffs for 43 gas distribution companies' services by an average of 1.6 times as of January 2021.
• Since the beginning of January 2021, rallies in protest against the increase in utility rates have taken place in a number of regions across Ukraine.
• Responding to the mass protests, President Volodymyr Zelensky instructed the government to urgently resolve the issue of gas tariffs for the population.
• On January 13, 2021, the Cabinet said it would propose setting a fixed price of natural gas for households at UAH 6.99 per cubic meter.