scholarly journals The debt crisis on Ukraine’s natural gas market and ways to solve it

2021 ◽  
Vol 2021 (1) ◽  
pp. 25-37
Author(s):  
Roman Yukhymets ◽  
◽  
Keyword(s):  
Natural Gas ◽  
Institutional Environment ◽  
Debt Crisis ◽  
Market Failures ◽  
Gas Distribution ◽  
Natural Gas Market ◽  
Market Participants ◽  
International Obligations ◽  
Gas Market ◽  
Gas Supply

The article considers the main reasons that have led to the debt crisis in the natural gas market of Ukraine due to the accumulation of debt from gas supply and gas distribution companies. The purpose of the study is to identify the main prerequisites for the formation of debt in different segments du-ring the reform of the natural gas market through partial implementation of the requirements of European energy legislation. Having chosen the European vector of development Ukraine is interested in meeting the requirements of European policy within the framework of its international obligations and aspirations for European integration. This necessitates adaptation of the national institutional environment to the basic requirements of the Second and Third energy packages. According to the existing international obligations, the national natural gas market is undergoing significant changes towards liberalization and development of competitive environment. However, in the segment of retail market and supply of natural gas to household consumers for a long time the necessary changes in the institutional environment did not occur or temporary decisions were made, which did not contribute to solving the sector’s crisis, but only froze the existing model of relationships between various market participants. Reluctance to implement unpopular solutions in the supply of natural gas to household consumers and attempts to shift the increase in the cost of gas supply tariffs for the needs of the household consumers to other categories of consumers led to a constant redistribution of monopolistic influence and accumulation of significant debt between market participants. The article analyzes the causes of debt between various participants in the retail segment of the natural gas market, which makes it possible to identify the main factors of such debt. These factors include: the lack of a sufficient level of transparency in the tariff for natural gas supply and transportation services; the absence of a 100% accounting for various categories of consumers, which makes it necessary to establish consumption standards, which later become the object of significant abuse; the existing model of public service obligations, which, given the significant redistribution of natural gas, results in significant market distortions; and the imperfect approach to calculating the costs of gas distribution companies in terms of temperature coefficients in the tariff, provided that gas metering exists not in energy units, but in cubic meters. Based on the results obtained in the article, the author sets forwards various recommendations for the implementation of measures, whose main content is to eliminate the institutional prerequisites that lead to the risks of market failures, which may cause debt.

scholarly journals The debt crisis on Ukraine’s natural gas market and ways to solve it

2021 ◽  
Vol 2021 (1) ◽  
pp. 32-48
Author(s):  
Roman Yukhymets ◽  
◽  
Keyword(s):  
Natural Gas ◽  
Institutional Environment ◽  
Debt Crisis ◽  
Market Failures ◽  
Gas Distribution ◽  
Natural Gas Market ◽  
Market Participants ◽  
International Obligations ◽  
Gas Market ◽  
Gas Supply

The article considers the main reasons that have led to the debt crisis in the natural gas market of Ukraine due to the accumulation of debt from gas supply and gas distribution companies. The purpose of the study is to identify the main prerequisites for the formation of debt in different segments during the reform of the natural gas market through partial implementation of the requirements of European energy legislation. Having chosen the European vector of development Ukraine is interested in meeting the requirements of European policy within the framework of its international obligations and aspirations for European integration. This necessitates adaptation of the national institutional environment to the basic requirements of the Second and Third energy packages. According to the existing international obligations, the national natural gas market is undergoing significant changes towards liberalization and development of competitive environment. However, in the segment of retail market and supply of natural gas to household consumers for a long time the necessary changes in the institutional environment did not occur or temporary decisions were made, which did not contribute to solving the sector’s crisis, but only froze the existing model of relationships between various market participants. Reluctance to implement unpopular solutions in the supply of natural gas to household consumers and attempts to shift the increase in the cost of gas supply tariffs for the needs of the household consumers to other categories of consumers led to a constant redistribution of monopolistic influence and accumulation of significant debt between market participants. The article analyzes the causes of debt between various participants in the retail segment of the natural gas market, which makes it possible to identify the main factors of such debt. These factors include: the lack of a sufficient level of transparency in the tariff for natural gas supply and transportation services; the absence of a 100% accounting for various categories of consumers, which makes it necessary to establish consumption standards, which later become the object of significant abuse; the existing model of public service obligations, which, given the significant redistribution of natural gas, results in significant market distortions; and the imperfect approach to calculating the costs of gas distribution companies in terms of temperature coefficients in the tariff, provided that gas metering exists not in energy units, but in cubic meters. Based on the results obtained in the article, the author sets forwards various recommendations for the implementation of measures, whose main content is to eliminate the institutional prerequisites that lead to the risks of market failures, which may cause debt.

scholarly journals PROBLEMS ISSUES OF REGULATORY PROVISION OF PRODUCTION ACTIVITY OF NATURAL GAS MARKETS

2019 ◽  
pp. 48-58
Author(s):  
A. M. Klyun ◽  
G. M. Kogut ◽  
M. O. Karpash ◽  
О.М. Karpash
Keyword(s):  
Natural Gas ◽  
Distribution System ◽  
Distribution Systems ◽  
Gas Distribution ◽  
Normative Documents ◽  
Natural Gas Market ◽  
Supply And Distribution ◽  
International Trends ◽  
Gas Market ◽  
The Eu

The formation of the modern Ukrainian natural gas market is accompanied by profound transformations of the national gas infrastructure: the creation and operation of new market operators, the redistribution of infrastructure facilities, the development and implementation of new requirements for the effective functioning of the entire system. At the same time, this requires from all parties a verified and balances strategy for the optimal implementation of all the obligations that Ukraine has undertaken to fully implement the requirements of the EU Third Energy Package, which aims to create an effective natural gas market based on the principles of free competition, proper consumer protection and security of supply. Despite the fact that the capacity of the Ukrainian gas transmission system and gas storages is one of the largest in Europe, the unbanding process has caused a number of threats in the area of regulatory support for production activities, requiring the consolidation of specialists' efforts to form optimal solutions to the problems that have arisen. In addition, the lengthy process of reforming and reorganizing the Ukrainian gas distribution system has led to a situation where the work of a natural gas distribution operator is facing a risk of imbalance in terms of inefficient standardization of the main areas of operation to meet the EU legislation requirements implemented in Ukraine. Therefore, to develop basic directions for the future work of gas infrastructure operators, it is necessary to take into account the acting capabilities of existing system for transportation, underground storage and gas distribution (taking into account the significant number of standardized indicators defined by the existing normative documents of the former USSR) and in accordance with the trends in the development of the European gas infrastructure introduce economically and technically feasible measures to standardize performance activities. Such works have to be incorporated into integrated research programs, during which regional and international trends are to be taken into account and adapted, the results of which will be the basis for future roadmaps and programs for the development of natural gas supply and distribution systems.

scholarly journals The impact of transaction costs on the transformation of the natural gas market of Ukraine

2019 ◽  
Vol 2019 (3) ◽  
pp. 60-77
Author(s):  
Roman Yukhymets
Keyword(s):  
Natural Gas ◽  
Transaction Costs ◽  
Institutional Environment ◽  
Energy Sector ◽  
Transformation Process ◽  
Third Party ◽  
Free Access ◽  
Natural Gas Market ◽  
Gas Market ◽  
The Impact

The desire to integrate into the European development model stipulated that Ukraine voluntarily assumed international commitments about transformation of the institutional environment according to the European model. The level of political awareness of the content of the necessary changes and how to achieve a systemic balance of reforming different sectors was often declarative in the absence of any sound estimates, including the implications for different economic actors. However, the need to reform the energy sector was determined not only by international obligations, but also by the presence of domestic problems, which over time without the application of systemic changes would become barriers to the entire further economic development of Ukraine. The main content of the implementation of European directives in the energy sector was just intended to systematically transform market relations by changing the rules of market functioning, which was supposed to solve the main crisis problems in various areas of the energy sector. The recent model of Ukrainian natural gas market was featured by all the shortcomings of the pre-reformed state of European markets: the tariff system did not promote rational consumer behavior, which exacerbated the pressure on the state budget; the delivery rules did not guarantee the proper quality of service; the absence of investment in the gas transportation sector made it impossible to expand fixed assets; the established transport and distribution rules became a barrier to free access to third-party networks and the development of competition in the supply segment. The actual implementation of the Second and Third Energy Package standards in the functioning of the national market of the natural year began in 2015, with the adoption of the Law on the Natural Gas Market. Today, an urgent task remains to estimate the process of reforming the natural gas market and to efficiently solve those crisis phenomena that caused the distortion of the institutional environment of the natural gas market. Since the accumulated problems of the previous model of the natural gas market were due to the inefficiency of the institutions, the article attempted to evaluate the effectiveness of the gas sector transformation process and analyze the impact of changes in certain market segments from the perspective of neoinstitutional theory and study the level of transaction costs.

scholarly journals COMPARATIVE ANALYSIS OF HISTORIC PREDICTIONS AND ACTUAL GLOBAL NATURAL GAS MARKET TRENDS FOR THE PERIOD FROM 1997 TO 2020

2021 ◽  
Vol 36 (4) ◽  
pp. 177-189
Author(s):  
Domagoj Šamarinec ◽  
Daria Karasalihović Sedlar ◽  
Ivan Smajla ◽  
Lucija Jukić
Keyword(s):  
Comparative Analysis ◽  
Natural Gas ◽  
Gas Production ◽  
Natural Gas Market ◽  
Market Participants ◽  
Production And Consumption ◽  
Market Trends ◽  
Price Movements ◽  
Gas Market ◽  
Actual Price

An accurate prediction of energy indicators is critical for orientation in the energy market, and it could give direction for policymakers and market participants. The aim of this research was to examine the accuracy of projections of natural gas market indicators. This paper presents a comparative analysis of historic predictions and actual global natural gas movements in several segments, namely production, consumption, and regional import dependence, as well as forecasted and actual price movements. The goal of this paper is to compare projected and actual natural gas market indicators. Predictions of market movements 20 years into the future are very useful, but they do have certain limitations. Those limitations especially apply to goods whose prices are regional and linked to price movements of another good, as is the case with natural gas. External influences have a direct impact on production and consumption, and it is rather clear that changes in one of the fundamental factors entails and magnifies the error of further predictions. Despite that, predictions of global production and consumption have proven to be very accurate. Based on the research results, it could be emphasized that for strategical planning and policy-making purposes, the predictions of natural gas production, consumption, or even import independence could be considered with great certainty, while price assumptions in the case of natural gas have shown significant mismatching, therefore, should be very carefully perceived.

Research on imbalance between supply and demand in China's natural gas market under the double-track price system

Energy Policy ◽  
2021 ◽  
Vol 155 ◽  
pp. 112380
Author(s):  
Jian Chai ◽  
Xiaokong Zhang ◽  
Quanying Lu ◽  
Xuejun Zhang ◽  
Yabo Wang
Keyword(s):  
Natural Gas ◽  
Supply And Demand ◽  
Price System ◽  
Natural Gas Market ◽  
Gas Market ◽  
Double Track
Sign in / Sign up

Export Citation Format

Share Document