Tymoshenko says NERC will increase GasCos’ tariffs today

According to Prime Minister of Ukraine Yulia Tymoshenko, the National Electricity Regulatory Commission (NERC) at its meeting today will approve increase in tariffs for gas distribution and supply. Tymoshenko assured higher tariffs will allow gas distribution companies (GasCos) to increase financing of grid maintenance and raise salaries to prevent workforce turnover. NERC was postponing tariff increase over the last couple of weeks, as exact numbers were not approved by regulatory bodies. Yesterday GasCos’ trade unions started picketing of the Cabinet of Ministers, demanding urgent increase of GasCos’ tariffs. Alexander Paraschiy: Last time gas distribution and supply tariffs were revised in July 2007. In October 2007 the NERC and the Cabinet of Ministers promised to raise tariffs for gas distribution in January 2008, to account for increase of operating costs and possibility of financing gas network upgrade. The process was postponed, so that majority of GasCos reported losses over the early quarters of 2008. We expect today tariffs will be upgraded by 25-40%, which will allow most of GasCos report profits in 2H08.