Kommersant: “Russia opens border with Ukraine”
Russia cancels gas export duty to Ukraine
Russia has finalised agreements on a gas discount for Ukraine. Prime Minister Vladimir Putin signed a resolution on April 30 cancelling the export duty on gas supplied to Ukraine. The 30% discount granted to Ukraine on April 1 has since saved the country $250 million. However, the Ukrainian government is insisting on more changes to the contract.
The government has released the resolution Putin signed on April 30 that set new export duties on natural gas supplies from Russia to Ukraine, approved by the parliaments of Russia and Ukraine on April 27. A government source told Kommersant that it was the last document required to apply the discounts agreed upon by Russian President Dmitry Medvedev and Ukrainian President Viktor Yanukovych on April 21 in Kharkov.
The document was signed as a supplement to the gas supply agreement of January 19, 2009. It stipulates a 30% discount on the price Ukraine pays for Russian natural gas in exchange for the extension of the lease on the Russian naval base in Sevastopol until 2042 (the original lease expired in 2017). The lease paid by Russia's Black Sea Fleet will be increased on a scale comparable to the gas discount.
According to the resolution, the zero export duty on Russian gas supplies to Ukraine will be effective through 2019. However, this rate will not be flat, but will be calculated according to a formula depending on the contract price of gas. For example, if the price is below $333.33 per 1,000 cu m the zero duty will be applied. However, the discount cannot exceed $100, so if the gas price is equal to or higher than $333.33, the export duty will be determined at 30% of the contract price minus $100.
This special customs duty will be applicable to 30 billion cu m of gas supplied to Ukraine in 2010 and to 40 billion cu m supplied annually from 2011 through 2019.
Anything above these levels will be subject to a standard 30% export duty applied to gas exports from Russia. The purchase price of Russian gas for Ukraine will be revised on a quarterly basis depending on the fluctuations of the petroleum products basket on international markets.
The new policy will mean $3 billion less in revenues for Russia's 2010 budget and $4 billion in 2011, Putin said.
The discount took effect on April 1. Yesterday Ukraine reported it had fully paid for the gas it consumed the previous month; Gazprom confirmed this information.
The discounted payment was $419 million. Ukrainian Prime Minister Mykola Azarov said the zero duty had saved the country about $250 million. However, Ukraine is still insisting on changing the pricing policy stipulated in its gas contract with Russia.
"We have not yet succeeded in persuading our Russian partners that the gas contract [former Prime Minister] Yulia Tymoshenko signed without thinking allows for indefinite price hikes as oil goes up globally. This is highly disadvantageous to our fragile economy," Azarov said. According to him, Russia and Ukraine will continue discussing a possible revision of the contract terms.
Nikolai Isain from the Institute of Natural Monopolies Problems pointed out that the cancellation of the gas export duty for Ukraine was fully legitimate (a government source told Kommersant that the document had been assessed by legal experts), but the precedent is unlikely to cause similar actions in relations with other consumers.
Initially, the political benefits of the agreement with Ukraine looked much greater than the economic ones, said Agvan Mikaelyan, director general of FinExpertiza, an audit and consulting group. But now the time has come to make progress on the other aspect of the agreement, Vladimir Putin's proposal to merge Gazprom with Ukraine's Naftogaz. This would bring more economic benefits to Russia, Mikaelyan added.
By Olga Mordyushenko
