NERC Raises Gas Prices For Households by 26%.

The National Electricity Regulation Commission (NERC) has passed a resolution to increase the retail tariff for natural gas for households from USD 34.6 to USD 43.6 per ths cm for households using gas meters and from USD 37.6 to USD 47.5 per ths cm for those paying a fixed monthly fee. The resolution still needs to be approved by the Ministry of Justice. The President’s veto of the Rada’s moratorium on gas prices gave this resolution the green light. Concorde Capital: The gas price increase came to no surprise, for the last few months the government has been saying that a gas price hike was inevitable. We believe the new prices will come into force soon. Even at these new prices supplying gas to households is not profitable, but the precedent is good news for Naftogaz and the state budget, as it will decrease the extent to which industries have to subsidize households. Gas prices for households have not changed since 1999 and are well below costs. We expect the price of gas for households to be raised again in 2H06.