NERC Puts USD 107/ths cm Cap On Gas Prices For Industrial Consumers?

The National Electricity Regulation Commission (NERC) has increased the limit on gas prices for industrial consumers by 29.8% to USD 107/ths cm (excl. VAT). The new price will take effect on February 20. This price is supposed to cover Naftogaz’s losses from selling gas at under its value in January. Concorde Capital: We have yet to see a formal document backing up these statements, however, if the price is eventually set at this level, it will imply a 58% increase over 2005 yearly average. This price does not include transportation costs, which are currently amount to USD 10/ths cm (regardless of the distance from the Russia-Ukraine border), meaning the end-point price for industrial consumers would be about USD 120 per ths cm. We expect the price to grow further in 2H06 or even earlier.