Ukraine has not used Russian gas in a year

As of Friday, November 25th, it has been one year since Ukraine last imported gas from Russia, as reported by the press service of Naftogaz Ukraine.

"It’s a landmark date for an independent Ukraine, as three years ago gas was the main symbol of political and economic dependence of our country on our northern neighbor. This dependence was ensured through high volumes of gas deliveries and prices for Russian gas that forced Ukraine to make political and economic concessions," the company stated.

Naftogaz stated that now Ukraine’s gas dependence on Russia has been eliminated but at the same time, the country is still the main transit route for Russian gas and they carry out this function in exemplary manner.  

"Without the creation of an alternate way to get gas supplies from Europe, we had to purchase gas from Russia at the prices dictated by Russia, paying extra billions of dollars to JSC Gazprom for unused gas in the last few years (under the ‘take-or-pay’ contract), and also paid for gas going to the occupied Donbas. Overcoming the Russian gas monopoly enables us today to fight for the gas independence of Ukraine in arbitration,” Naftogaz reports.

Abandoning Russian gas has allowed Ukraine to start reforming their gas market (the share of private importers increased from 1% in 2014 to 26% in 2016) and make changes to the corporate management of Naftogaz. The company itself, for the first time in a long time, has broken even and will pay 60 billion hryvnia in taxes (23 billion US dollars) this year.

"This has been achieved, in particular, through the elimination of devastating, hidden subsidies and the establishment of the new targeted subsidies system to assist low income citizens.  Moreover, the operating efficiency of Naftogaz itself has been significantly improved: intermediaries for purchases and sales have been eliminated, and a new, transparent procurement system is being implemented, through which the group managed to save over 1.5 billion hryvnia (58.4 million US dollars)," Naftogaz reports.

At the end of November 2015, Ukraine refused to purchase Russian gas from Gazprom as Naftogaz considered its price unreasonably high.

  Ukraine, Russia, gas