The shoots of a civilized gas market, which managed to make it through Ukraine’s monopolized soil, are likely to die. The first bids on 500 million cubic meters of natural gas were annulled.
According to Ukrhazprom (Ukrainian Gas Industry) Co. Board of Directors member Volodymyr Yena, the starting (minimum) price of $49 per thousand cubic meters were unsatisfactory. This fact is worth giving a good pause, for the bids were announced to find the true market price. According to the results, it has to be considerably lower than $50, although Ukrhazprom is selling natural gas to people and the budget sphere at $66 per thousand cubic meters.
Interestingly, neither the Ministry of Economics, State Oil and Gas Industry Committee, nor Ukrhazprom have realized that the natural gas market situation is working against both them and the budget. The organizers intend to increase the traders in number, attracting also Ukrnafta (Ukrainian Oil), Poltava Oil & Gas, Black Sea Oil & Gas, and Russia’s Gasprom. The competition among traders will surely increase, and they will be forced to either cut the price or annul the bidding. They are likely to choose the latter option.
However, the participation of Gasprom will be the decisive factor for the future of the tender. But a source close to its Kyiv office of doubted such a possibility. Gasprom does not cut prices without good reason. Another source reports that the former director of United Energy Systems of Ukraine, Yuliya Timoshenko, met with Rem Viakhirev during his recent visit to Ukraine. This may mean that the corporation has intentions to make a comeback in the natural gas market.






