Tariffs for services of the Ukrainian UGS will change from July 1, 2022

From July 1, 2022, there will be a change in tariffs for underground gas storage (injection, withdrawal) services. The relevant decree No 656 was adopted by the NEURC on June 30, 2022.

The Regulator started a tariff review at the end of last year. In particular, a detailed calculation of the cost of underground storage services and its public discussion were carried out. With the beginning of martial law, the introduction of new tariffs was postponed.

Bringing the cost of UGS services to an economically justified level became obvious even before the start of a full-scale war and intensified with its onset. A preliminary review of tariffs for underground gas storage services took place in mid-2020. During this time, the price of natural gas increased more than 6 times, which provoked a sharp increase in costs for production and technological needs.

"Inflation in the country caused excessive expenses that were not covered by tariff revenue. As a result, Ukrtransgaz ended 2021 with a loss. While maintaining the current tariffs, the company could not carry out the necessary modernizations and repairs, which endangered the energy security of Ukraine. Therefore, bringing the tariffs to an economically justified level has become a requirement of time and objective market conditions", said Sergii Pereloma, Head of Ukrtransgaz - Storage System Operator of Ukraine.

So, from July 1, 2022, the cost of Ukrainian UGS services will be as follows:

• Storage (per day) - UAH 0.40 per 1,000 m3 per day (with no VAT);
• Withdrawal - UAH 253.03 per 1,000 m3 per day (with no VAT);
• Injection - UAH 243.52 per 1,000 m3 per day (with no VAT).

In case of booking individual natural gas storage, injection, withdrawal services for a period of one month in advance, a coefficient of 1.1 is applied. When booking a day in advance - 1.2.

Together with the tariff review, the Investment Program for the development of UGS for 2022 for the total amount of about UAH 500 million was approved. This will allow Ukrtransgaz to continue updating the technological base of the underground storage system where the current situation allows.

We would like to add that, on the one hand, the new tariffs will allow to ensure stable and safe operation of UGS, to implement the planned investment programs. On the other hand, even if the tariffs are increased, Ukrainian UGS will remain competitive on the EU gas market.