According to experts, regional gas distribution companies have unreasonably doubled the price of natural gas for the population.
On December 8, BRDO experts filed a petition for violation of the law on economic competition protection by operators of gas distribution networks (DSOs) to the Antimonopoly Committee of Ukraine.
Energy sector experts analyzed the current situation in the natural gas retail market. They found that today mainly gas utility companies (subsidiaries of regional gas distribution companies) supplied gas to the population.
According to the National Energy and Utilities Regulatory Commission (NEURC), in the first quarter of 2020, 69% of natural gas supplies to the population were carried out by suppliers, majority stakes (shares, equities) of which were owned by gas distribution network operators united under the brand name “Regional Gas Company”, about 2% – by Naftogaz Group, and about 29% – by other suppliers.
Most consumers did not change their supplier due to a lack of information about the possibility of such change and complicated procedures. Moreover, regional gas supply companies often complicate the process of changing suppliers through other actions, in particular, do not provide access to EIC-codes, printing them on gluing and cut here lines of utility bills.
As regional gas supply companies do not compete significantly in the market of natural gas supply to household consumers, the gas price for the population has doubled compared to the 1st quarter of 2020.
Additionally, in September 2020, some gas supply companies set the same natural gas price for the population, and this is extremely suspicious given the free and open market functioning.
For example, the following companies supplied gas for the population at the same price of UAH 5.49/m3: KyivGasEnergy SE, Vinnytsiagaz Zbut LLC, Volyngaz Zbut LLC, Dnipropetrovskgaz Zbut LLC, Dnipropetrovskgaz JSC, Dniprogaz JSC, Kryvorizhgaz JSC, Zhytomyrgaz Zbut LLC, Zakarpatgaz Zbut LLC, Ivano-Frankivskgaz Zbut LLC, Lvivgaz Zbut LLC, Mykolayivgaz Zbut LLC, Odesagaz-Postachannya LLC, Polissya-gaz LLC, Poltavagaz Zbut LLC, Rivnegaz Zbut LLC, Sumygaz Zbut LLC, Lubnygaz Trading House LLC, Kharkivgaz Zbut LLC, Kharkivmiskgaz JSC, Khmelnytskygaz Zbut LLC, Chernivtsigaz Zbut LLC, Chernihivgaz Zbut LLC, Kremenets Gas Supply Department SE.
The actions of regional gas supply companies consisting in a rapid increase in natural gas prices for household consumers may contain possible violations of the Law of Ukraine “On Protection of Economic Competition” in the form of abuse of monopoly (dominant) position in the natural gas supply market by setting the selling prices and conditions that could not be established in a competitive market environment. As a result, it distorts competition in the natural gas supply market and restricts household consumers’ interests.
The Energy Sector experts emphasize that it be possible to achieve market and competitive gas prices only by overcoming the long-standing monopoly in the natural gas supply sector. Given the significant competition in the gas market, business entities cannot significantly increase the final product price, as they risk losing their market position and some customers.
Back on August 1, 2020, a free and open market of natural gas for household consumers was launched. Consumers have the right to change their supplier, and gas prices should be established exclusively in market conditions. Thus, consumers have the right to choose the supplier offering the best price for their services.
Appeal to the AMCU on violation of the law on the protection of economic competition
Звернення до АМКУ про порушення законодавства про захист економічної конкуренції