Kyiv Post: Market pricing of gas is critical and patriotic for Ukraine
The need to move immediately to the market pricing of gas is both critical economically and a patriotic necessity for the defense of Ukraine. For too many years, this step has been delayed due to the false argument that domestic prices controlled at low levels were for the protection of the citizens. It is apparent, that this approach was supported by corrupt oligarchs and the Kremlin, both of whom used these policies for their advantage and for the subjection of the country. The policy has led to the dependence of Ukraine on Russian gas and the persistence of Russian influence over its politics and destiny. An immediate adoption of market prices is essential at this turning point in history.
The reader should be reminded that under the present pricing regime, Ukraine is importing natural gas at almost $400 per thousand cubic meters. At the same time, the domestic controlled price is around $35 per thousand cubic meters.
Consequently, the annual need for subsidies from the national budget to Naftogaz has been in the order of around $10 billion or 7.5 percent of gross domestic product. There should be no misunderstanding, the citizens of Ukraine are already paying $400 per thousand cubic meters for gas - they simply don’t see it in their utility bills but in the national budget. This policy must be reversed for many reasons.