How to return liquidity to the exchange? The reporting mechanism and price index were the topics discussed by gas market participants at the Energy Club meeting.
Key thoughts and quotes:
– There are only three players that shape supply and demand in the gas market today: “Naftogaz, Ukrnafta and GTSOU. Our prices are disconnected from the prices formed on adjacent foreign markets, so we have problems with liquidity on the exchange;
– Liquidity can be created by introducing the sale of a small percentage of 3% or 5% on the exchange. This will develop liquidity and enable the introduction of standardized exchange products;
– We believe that gas consumption will continue to decline, so we still need to analyze and work out a model for exporting natural gas when the situation allows, when there is no demand in the domestic market. Last year, producers kept their volumes that were not sold;
– Our proposal is also to remove the binding of purchases of only Ukrainian production by Naftogaz, because in March and April of this year there was a situation when prices on the Hungarian exchange were competitive with prices on the domestic Ukrainian market. Therefore, some volumes could be offered from imported resources even cheaper than those offered by Ukrainian producers;
– Without a reporting mechanism, we will not be able to receive the index requested by market players.
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