Naftogaz files $236 million lawsuit against Ukraine’s government

The gas company Naftogaz of Ukraine asked Kyiv Economic Court to recover compensation of more than 6.63 billion hryvnias ($ 236 million) from the Ukrainian government due to the losses the company allegedly suffered because of supplying the gas below the market prices, reports Ukrainski Novyny news agency citing.

According to the news agency, the company filed a lawsuit in October this year. Naftogaz accused the Ukrainian government of inaction, which “consists of the uncertainty in determining the funding sources and the procedure for determining compensation provided to the subjects of the natural gas market.” On October 3, the court accepted this claim for the consideration.

In 2015, the Ukrainian Cabinet of Ministers obliged Naftogaz to fulfill special regulations for selling gas to the country's population at regulated prices during the year. The commitment has been repeatedly extended and has expired since November 1.

The chief executive officer of Naftogaz, Yuriy Vitrenko, commenting on the decision, wrote on his Facebook page that the government does not have the authority to set a fair price for gas. He noted that the Cabinet could take such measures only in the case of compensation.

In mid-October, Prime Minister of Ukraine Volodymyr Groysman announced that gas prices in the country would increase by 23.5%. The increase in gas prices was requested by the International Monetary Fund as a condition for the new money tranche to Ukraine.

From November 1, Naftogaz raised gas prices for Ukraine’s population up to 7,482 Ukrainian Hryvnia per 1,000 cubic meters, including VAT.

  Ukraine, Naftogaz, Verkhovna Rada, Groysman