Authorization

Russia gives Ukraine discount on gas in Q1, price offered at about $212 per 1,000 cubic meters

Russia gives Ukraine discount on gas in Q1, price offered at about $212 per 1,000 cubic metersRussian Prime Minister Dmitry Medvedev has signed an ordinance on the size of an export duty on gas supplies to Ukraine for the first quarter of 2016, the official web portal of legal information reports.

The ordinance stipulates that, considering the information announced earlier that the contractual price for the first quarter of the year would be $230 per 1,000 cubic meters of gas, the size of a discount on the contractual price, which is equal to the size of an export duty, will be $17.77 per 1,000 cubic meters. Therefore, the actual price offered to Ukraine is about $212.23 per 1,000 cubic meters.

Ukrainian Energy and Coal Industry Minister Volodymyr Demchyshyn had said earlier that Ukraine was ready to purchase gas from Russia in the first quarter of 2016 only if prices were reduced to under $200 per 1,000 cubic meters. "Russians understand that, in order to be competitive, they need to lower the price to less than $200, and the matter is not about some discounts but simply about the market trends," Demchyshyn said.

Russia sets the price for Naftogaz Ukrainy by providing discounts through special customs duties, being guided by spot prices for gas in Europe.

At the present moment, forward contracts for the first quarter of 2016 on European hubs are being traded at a level of $170 per 1,000 cubic meters.

Gazprom had earlier requested Naftogaz Ukrainy that it provide a letter of guarantee indicating its gas consumption obligations for the first quarter of the current year.

Source: Interfax-Ukraine
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