Prime Minster Viktor Yanukovich announced that the Cabinet had passed a resolution capping wholesale gas price for enterprises selling gas to households at $67/tcm, 18% lower than approved in July ($82/tcm). Although the retail tariffs have yet to be reconsidered, it was already announced that differentiated retail gas prices will be introduced, depending on apartment size and per capita consumption. According to Energy Minister Yurii Boyko, the decrease will not affect Naftogaz Ukrayiny’s financials. Vladimir Nesterenko: For Naftogaz wholesale price caps do not matter, as long as it consolidates both extraction and retail. It also looks like the Government doesn’t expect Naftogaz’s effective retail price to be affected due to the introduction of differentiated pricing. On the other hand, the reduction of wholesale prices will affect Ukrnafta (UNAF: SELL), as it will be obliged to sell gas cheaper. However, the impact will be minimal due to the relatively small share of revenue coming from its gas business.