Ukraine Names Gas Debtors

State Naftogaz Ukrainy has begun publishing a weekly list of its gas debtors – regional and city gas distributors – for unpaid debts now totalling hryvnia 20.4 trillion ($717mn) as of end-November, it said January 15. This is more than twice what it was a year ago, even though the utilities buy the gas at regulated low prices; and will have grown further in the high-demand month of December.

Naftogaz says it wants to stop the uncontrolled escalation in the debts of companies it has no choice of supplying: it has the enforced monopoly of low-priced sales. Publishing the company names will allow the government to see the extent of the problem.

The complicated payment system involving discounts and subsidies has been amended by decree, and from the start of this year it allows these intermediary gas companies to defraud the state directly, as they can use state funds to settle not only bills for deliveries to households but also to commercial consumers, leaving them with less to pay Naftogaz, which in turn cannot pay what is due to the budget, according to Naftogaz.

Naftogaz has been demanding an end to this system, joining the chorus from lenders such as the World Bank in their demands for a transparent market-oriented system that cannot be twisted for the benefit of the oligarchs who own the intermediaries.