NERC Raises Gas Transportation Tariffs.

Starting June 1, the National Electricity Regulation Commission (NERC) plans to raise the average tariff for transporting natural gas via mainline pipelines by 47.1% to USD 11.2 per ths cm and the tariff for gas transportation through distribution pipelines by 41.4%, to USD 4.1/ths cm. The commission announced that will allow improving the state of gas transport networks and decrease gas losses.  Concorde Capital: We believe the hike was in the first place motivated by the government’s desire to support Naftogaz’s financial stance. Including the June’s increase, maximum gas transportation cost to industrial consumers will almost double, from USD 7.7 in the beginning of the year to USD 15.3/ths cm starting June. However, that would imply only moderate increase of total gas cost to industrial consumers – 6.6% YTD, to about USD 124 per ths cm on average.