Andriy Mizovets, the lobbyist of gas traders, about the market influence of Naftogaz and non-market restrictions of the government

25.03.2021. Author: Serhii HolovnovSource

In the interview with Business Censor, the President of the Association “Gas Traders of Ukraine” (AGTU) Andriy Mizovets told how the limitation of gas prices for the population has stopped the development of the gas market and how the state company Naftogaz uses market power.

The Association “Gas Traders of Ukraine” combines about 30 traders. Andriy Mizovets, as the leader of it, is a partner of Roman Storozhev. In early 2014 Storozhev headed the State Service of Geology and Subsoil of Ukraine for four months. He is engaged in the trading business – “Craft Energy”, “Abbakor Trade”, “Center Energy” traders.

In the interview with BC, the President of AGTU Andriy Mizovets told how the restrictions of gas prices for the population interfere with the development of the gas market, which structure of the gas market is, and whether Naftogaz operates in identical conditions with other traders.

How did you perceive the Ministry of Energy Initiative on the introduction of a gas price limit for the population at UAH 6.99 per cubic/m in January – March?

We have a gas market for non-domestic consumers where there is crazy competition. Suppliers are more than 700. Is it cool? Cool!

We have gas imports that brought to automatism. Any company that has signed up can import gas today. Despite the registration, licenses, paper nuances, liberalization exists.

The gas market for domestic consumers (population) began on a good note, but we continue, unfortunately, on a minor.

We do not see the market now. I do not even mention the opening of the market for the Teplokomunenergo (TKE). It does not understand anything yet.  BC: public service obligation (PSO) for TKE according to the Cabinet of Ministers No. 869 from October 2018 should be abolished from May 1, 2021, but because of great problems in this segment it will most likely not happen.

Also, the Ministry of Energy and acting Minister of Energy is proposing a determinate type of action at present. This is surprising because the ideas are not bad, but the realization that is offered is strange.

For example, the idea of ​entering an exchange of Ukrgasvydobuvannya (UGV is included in the state group of Naftogaz, which produces about 70% of gas in the country – BC) is supported by all market participants. Because it takes a fair price of gas off the table.

I repeated and repeat: as soon as we see a real stock price of the resource, it will knock a trump card off the hands of all populists who tell Gas is free, or cost $20, $50 per thousand cubes, etc.

On the other hand, the market was limited to UAH 6.99 per cubic/m for the population. It means, the Cabinet made it by analogy. Let us say, the National Bank came to the market and said: “So, gentlemen bankers, you have a year to sell the currency at the price of 22 UAH per dollar until the end of the decision”. Moreover, no one is interested in where and at what price you will take it, and which is your profit, etc.

Who is representing the Association “Gas Traders of Ukraine” (AGTU)? I asked other suppliers why they do not enter AGTU of Storozhev-Mizovets? The answer: “Because it is the Association of Storozhev”.

What percent of the supply market for industry do you represent and do association companies supply gas to the population?  Why do you worry about UAH 6.99 per cubic/m?

Everyone worries about the price of UAH 6.99 per cubic/m because it is a non-market one. Companies that are included in the Association are supplying gas to the population. However, the volumes are not large. Moreover, these negative sales profits are compensated by positive results from supplying consumers.

Firstly, the core of the Association companies is not related. Secondly, all of them exist in the market for a long time. Thirdly, what are we defending? Our positions are very simple. We are in favor of honest competition, transparent market rules. We are supportive of the only position of Association members in NKREKP and Minenergo. This is a position of those suppliers who are not large because they do not occupy a significant market share. But all of them work with consumers in the field.

The share of the Association’s market of companies (30 traders) from 5% to 10% (industry), depending on the season….


Leave a Reply

Your email address will not be published. Required fields are marked *