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Corporate debts in Ukrainian gas market exceed UAH 200bn, regulator says

The authorities do not have a plan how to solve the problem.

Corporate debts in Ukrainian gas market exceed UAH 200bn, regulator says
Incukalns gas storage facility near Ragana, Latvia
Photo: EPA/UPG

As of October this year, the amount owed by dozens of large and small companies for natural gas has already exceeded UAH 200 billion. And this figure is only growing by day, journalist Mykola Topalov said in an article on the Ekonomichna Pravda (EP) website, citing available data from the National Energy and Utilities Regulatory Commission (NEURC).

The problem of outstanding gas payments is not new for Ukraine, but after the Russian invasion, it has reached unprecedented proportions.

However, there are currently no ways to repay, write off or restructure at least part of the amount specified by the NEURC for objective reasons: some debtors are currently in the area of active hostilities or even in the temporarily occupied territory.

Current debts can be divided into several key categories:

Debts accumulated by heat producers: out of the total debt of non-household consumers of UAH 129.7 billion, these heat producers account for UAH 90.4 billion.

Debts accumulated by households: As of the beginning of October, households' debts to gas suppliers amounted to UAH 29 billion.

Debts accumulated by regional gas companies and gas distribution companies: UAH 21.3 billion is owed to Naftogaz by gas distribution companies for so-called technical gas or gas for production and technological costs. The regional gas companies also owe UAH 15.2 billion to the Ukrainian GTS Operator for the daily negative imbalance. In simple terms, this is gas that was taken from the system without payment.

At the same time, the experts and market participants interviewed by EP emphasise that, as in the case of debts in the electricity market, there is no simple solution to all the accumulated problems - a resolution, order or law - at the moment.

Among the possible steps to solve this problem, experts suggest lifting the ban on disconnecting consumers (except in the areas where military operations are taking place - ed.) to increase the level of payment discipline. Another step is a gradual transition to economically balanced tariffs, i.e. their increase.

EP's government source said that all these factors are exacerbating the problems in the market of gas supply, heat generating and supply companies.

"We are confidently slipping into a systemic debt crisis. If the problem is not gradually resolved, one day the heating season in many regions may not start," the government source concluded.

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