Energy Strategy of Ukraine must include measures to achieve reliable, effective and balanced supplies of natural gas and oil products to domestic consumers, as well as uninterrupted transit of oil and gas to the European Union, President Viktor Yanukovych said, speaking at a meeting of the Governing Council of the Committee on Economic Reforms.
In order to achieve that, he said, it is necessary to raise funds on foreign and domestic markets for ensuring financial stability of Naftogaz Ukraine and realization of its investment projects, creating a transparent and efficient vertically integrated company on its basis.
"If it we have to give up a part of the company, to sell a percentage of its shares on the international markets, it must be done; we cannot just keep talking without taking steps to revitalize the company. It is necessary to attract good investors," he said, presidential press office cited the president as saying.
"We must resolve the complex issues fixed in the Program of Economic Reforms. These are changing formation of hydrocarbons prices, stopping cross-subsidization, abandoning compulsory sale of domestically produced gas at regulated prices, providing protection of consumers’ right of free choice of a supplier, attracting private investors into the sector, ensuring the access to gas transportation and gas distribution networks, diversifying imports, etc.," Viktor Yanukovych said.
He also said in the nearest future he would like to hear a plan of providing domestic refineries with the necessary amount of raw materials, particularly through the Odessa-Brody pipeline.
In the same context, the President dwelled on such a significant public spending item, as communal services, which is one of the largest recipients of budget funds due to the tariff policy imperfections. For example, Viktor Yanukovych said, the Government sets reduced price of natural gas for communal heating and power enterprises, and is then forced to grant the appropriate subsidies to local governments and citizens.
"Naftogaz Ukraine has become a major lender for housing sector, hence its financial misbalance," he said.
The President added that since 1999 the debt of communal heating and energy enterprises has amounted to 13.1 billion UAH, including 4.1 billion UAH increase this year.
"It is necessary to bring utility tariffs in line with actual costs of utilities. But it should be done wisely, at the same time reducing the burden on the state in this area, and ensuring that our citizens feel this policy aims to improve their lives," the President added.
Any delay in solving this problem is very dangerous, Viktor
Yanukovych said. "Albeit the significant delay, we want to create a new
regulator, but it could end in progress in this area stopping. After
all, the National Electricity Regulatory Commission will thus loose the
authority to set tariffs. There is no mechanism of groundwork and staff
transfer. Therefore, please, approach the problem carefully," Viktor
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