The Cabinet of Ministers of Ukraine has revised its proposal on the increase of the royalty for the use of deposits for gas which is sold not for the needs of households to 55 percent and 28 percent depending on the depth of extraction, while earlier it was proposed that the single royalty of 70 percent is set.
The initiative is stipulated in draft law No. 4309A registered on July 21 and revised on July 30.
Earlier the Cabinet of Ministers of Ukraine proposed that the
royalties for the use of deposits for gas that is sold for needs other
than those of households be increased to 70 percent irrespective of the depth
of wells where it is extracted, while the new draft law sets the royalty
of 55 percent for gas extracted at the depth of up to five km and 28 percent for the
depth of over five km.
At present, the royalties for the use of deposits during gas
extraction which is sold for needs other than those of households amount
to 28 percent of the cost of gas for the depth from five kilometers and 15 percent
for the depth over five kilometers.
The royalties for the use of deposits during extraction of gas for
the needs of households will be retained at the current level: 20 percent of
its cost for gas from the depth of up to five kilometers and 14 percent for gas
extracted from the depth of over five kilometers. It is also proposed
that the royalty for the use of deposits during extraction of gas on the
shelf not be revised (11 percent).
The cabinet also retained the earlier proposed option for the change
of the taxation base for natural gas which is sold not for the needs of
households. The actual price of gas extracted in the country will be the
upper limit of the price of natural gas sold to industrial consumers
set by the National Commission for Energy Regulation (NCER).
At present, the actual price of gas is an average customs cost of imported natural gas.
Ukraine raised gas production by 1.5 percent or by 142.1 million cubic
meters on the continental part of the country in January-June 2014
year-on-year, to 9.821 billion cubic meters (bcm), including a 1.8 percent
increase or 166.1 million cubic meters to 9.468 bcm of natural gas.
Naftogaz’s enterprises, not taking into account Chornomornaftogaz, cut
gas production by 2.5 percent or 211.8 million cubic meters, to 8.396 bcm,
including 8.09 bcm of natural gas, down 2.3 percent or 189.8 million cubic
meters.
Other oil and gas companies operating in Ukraine raised output by 33 percent
or 353.93 million cubic meters, to 1.425 billion cubic meters of gas,
including 1.378 billion cubic meters of natural gas, up 34.8 percent or 356.01
million cubic meters.
