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The American Chamber of Commerce in Ukraine Calls to Review the Principles of Gas Neutrality Fee Calculation

The American Chamber of Commerce in Ukraine Calls to Review the Principles of Gas Neutrality Fee Calculation

The American Chamber of Commerce in Ukraine (the Chamber) has been consistently supporting the initiatives to create an effective market-based mechanism for transparent and open cooperation between gas market participants and the Gas Transmission System Operator of Ukraine (GTSOU), needed in the framework of balancing requirements.

However, the arrangement of such a market-based mechanism is expressly questioned due to the lack of GTSOU ability to undertake the balancing actions by purchasing short-term standardized products on the trading platforms, the insufficient transparency of the neutrality fee components as well as disparity of the gas volumes used in its calculation.

The Chamber member companies’ experts believe that introduction of a neutrality fee ahead of the development of a transparent cost allocation model and appropriate essential market structures do not meet its initial purpose and may further have a negative impact on Ukraine’s gas market functioning.

The Chamber raised this issue in position papers to the National Commission for State Regulation of Energy and Utilities (NCSREU) and the GTSOU. Also, the American Chamber of Commerce in Ukraine, the European Business Association, and three Ukraine’s leading gas associations: Association of Gas Producers of Ukraine, Ukrainian Gas Traders Association and Association of Subsoil Users of Ukraine requested the Energy Community Secretariat to provide recommendations for the effective implementation of the transparent and non-discriminatory mechanism for neutrality fee calculation considering the current Ukrainian gas market development status.

The American Chamber of Commerce in Ukraine calls upon National Commission for State Regulation of Energy and Utilities to defer the implementation of the neutrality fee in order to build on the essential market mechanisms as well as to develop and publish the neutrality fee calculation methodology that will establish the transparent, non-discriminatory and cost-reflective fee for gas market participants.

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