Three prices for natural gas and one for biofuels — article by Georii Geletukha and Kostiantyn Bogatov

11/02/2022
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About 40% of Ukraine’s energy is still forced to buy abroad, particularly in Russia. It is direct energy, and therefore political, dependent on the enemy. On the true price of “cheap” gas, UABIO Head of the Board Georgii Geletukha and UABIO Board Member Kostiantyn Bogatov have told in the column “Three prices for gas and one for biofuels” for the online media “Economichna Pravda”.

You will learn in the article about:

Crisis of the energy market, in particular, natural gas market;
implications of Covid-19 for the energy market;
provocations of the Russian Federation, which affects the stability of pricing and gas supply to Europe in general;
growing demand for biofuels;
the paradox of having three different gas prices in Ukraine: for the population – about UAH 8000 / 1000 m3, for budgetary institutions – about UAH 16000 / 1000 m3; for industrial and commercial sector – market price, from UAH 35000 / 1000 m3 and above.

At the same time:

One price for biomass and biofuels. For example:

the cost of wood chips is now UAH 2,500 / t,
the cost of sunflower husk pellets — UAH 6500 / t.

Due to gas subsidies and the huge gap between the market and the actual price of natural gas for the population and district heating, biofuels are currently competitive only for industrial and commercial institutions. By providing the population and budget institutions with gas at a subsidized price (three to five times lower than the market price), the government creates a fictional picture of relatively “cheap” fuel for the final consumer.

Rational use of very expensive natural gas is possible today. If it is used to generate heat, only where there are no other, alternative sources. Alternative sources, in particular biomass, are environmentally friendly fuels that significantly reduce the impact of catastrophic climate change.

Source: Article by Georgii Geletukha and Kostiantyn Bogatov “Three prices for natural gas and one for biofuels” (in Ukrainian).