Who will pay for cheap gas for unrecognized Donbas republics?

Author : Mykyta Sinitsyn

Source : 112 Ukraine

The price of natural for residents of the temporarily uncontrolled part of Donbas is almost 7 times cheaper than in Ukraine
18:46, 1 November 2017

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Depressing picture of life in the self-proclaimed "people's republics" is “brightened up” by enormously cheap utility tariffs, which is usually the main argument (along with the "absence of fascism") of the LPR/DPR propaganda.

The price of natural for residents of the temporarily uncontrolled part of Donbas is almost 7 times cheaper. Consequently, heating is inexpensive.

The current tariff for 1 cubic meter of natural gas in Ukraine is 0,27 USD. Heating will cost depending on the city on average from 46 USD for 1 Gcal (if the house has a heat meter.

Related: Stock of liquefied petroleum gas in Ukraine increased by 10.7%

In turn, in the self-proclaimed DPR, the cost of a cubic meter of gas is from 0,04 USD. In the self-proclaimed LPR, the cost of a cubic meter of gas is from 0,05 USD. Business of DPR has got relief. So, since October 15, the tariff for heating for business in Horlivka from was lowered, and the commission for utility bills was reduced from 5 to 2 %.

There is a reasonable question, who will pay for that?

October 24, the head of the National Joint Stock Company Naftogaz of Ukraine Andriy Kobolev said that the Stockholm Arbitration is considering the issue of Russian gas supplies to the occupied territories of Donbas.

Since January 2015, Gazprom has supplied 5.6 billion cubic meters of gas to the territory of the self-proclaimed Donetsk and Luhansk people's republics with a total cost of 1.65 billion dollars. And the Russian monopolist presents accounts for payment for these supplies to Ukraine - Naftogaz of Ukraine, because the Russian Federation does not recognize the self-proclaimed Luhansk and Donetsk people's republics as independent states.

Related: Appeal court confirms permit for installing Siemens gas turbines in Crimea

In fact, October 26, Naftogaz noted another significant date - 700 days without the import of Russian natural gas.

According to, the average price of natural gas from Russia for the self-proclaimed republics, is higher than Ukraine pays for reverse gas from Europe, given the long path of the "European" gas.

Thus, the Russian gas monopoly, Gazprom, in the third quarter of 2017 cleared two consignments of natural gas for Ukraine (gas is delivered to the occupied regions of Donetsk and Lugansk regions) at an average price of $ 239.4 per 1,000 cubic meters, while reverse gas from Europe for this period cost Ukraine not more than $ 214.5 per thousand. cubic meters. This is evidenced by the data of the Russian customs, which are available to

Related: Ukraine to hold negotiations with IMF on natural gas price

In particular, in July, a small consignment of gas in the volume of about 288 thousand cubic meters from 232.5 dollars per thousand cubic meters was cleared for occupied territories. September 18, the Russian customs authorities issued a delivery to Ukraine of 1,200 million cubic meters ($ 287.3 million) for $ 239.4/ thousand cubic meters, the newspaper reports.

At the same time, according to the Ministry of Economic Development and Trade, the average price of gas imports from Europe to Ukraine in July was $ 214.5 per thousand cubic meters, in August - 210.1 dollars, in September - 212.9 dollars per thousand cubic meters.

In Russia, Gazprom insists that gas supplies to Donbas continue on the basis of a contract with Naftogaz in 2009. Thus, the price of $ 239.4/thousand cubic meters can be considered a contract price for the 3rd quarter of 2017 under the existing contract.

Judging by the fact that Gazprom is trying to force Ukraine to pay for natural gas, it does not receive any payments from LDPR, at least officially.

Consequently, the money paid by residents of the temporarily occupied territories for gas and heating is not used to pay for natural gas, and in fact they are stolen by the leadership of the self-proclaimed republics.

Related: Ukraine to propose new gas price formula to IMF, - Reuters

The question arises: will Ukraine and Naftogaz pay for these supplies? Stockholm Arbitration considers this issue.

However, there may be a loophole in the recently adopted law of Ukraine "On the peculiarities of state policy to ensure the state sovereignty of Ukraine over temporarily occupied territories in Donetsk and Luhansk regions".

Article 6: "The State of Ukraine is not responsible for the unlawful actions of the Russian Federation as an aggressor state, its armed forces, other military formations and the occupation administration in the temporarily occupied territories in Donetsk and Luhansk regions."

Illegal actions mean supply of natural gas to the "authorities" of LPR and DPR, which, according to Ukrainian legislation, are considered "occupation administrations of the Russian Federation" in the occupied part of Donbas. That is, from the point of view of the law, the Russian Federation supplies natural gas to itself, and even at an inflated price, demanding payment for it.

Related: Siemens to not produce gas equipment for Ukraine, - Naftogaz head

However, it is unknown whether such references to national Ukrainian legislation will be satisfied by Stockholm's international arbitration.

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