The Cabinet Prepares For Hike In Gas Prices

The government cancelled its ruling from Feb 9, 2006, which limited gas prices for all categories of consumers at $110/tcm (excluding transportation and supply cost, and VAT). Vladimir Nesterenko: Obviously, the government is preparing for higher gas import prices next year. However the NERC still has to cancel one of its own earlier rulings limiting gas prices for industrial consumers at UAH 548/tcm ($108.5/tcm). We expect a new cap for industrial consumers at about $140-150/tcm (excluding transportation and supply cost, special 2% charge and VAT) to be put in place by the end of the year. The issue of differentiating gas prices for different industries is still open, and the market is currently watching nitrogen fertilizer producers to see if they will succeed in getting gas price discounts in 2007.