Russia has approved a discount on natural gas prices offered to Ukraine at about $212 per 1,000cm of Q1 deliveries, down from the initial level of $230, Ukraine News Agency Interfax reported.
According to Press TV, Moscow seeks to adjust its gas prices to the level of European market rates. Russian Prime Minister, Dmitry Medvedev said that “Russians understand that in order to be competitive they need to decrease the price,” adding that the price reduction was intended to reflect “market conditions.”
Forbes confirmed that the lower price was mostly reflected by falling natural gas futures in the market and not Moscow subsidies. Yet, Ukraine will likely end up paying more than market rate as energy prices are expected to fall lower in the first half of 2016, while the price agreement with Moscow has been locked for the first three months of 2016.
In 2015, Russia has seen a decline in its gas production reaching the level of 635.349bcm, down 1% year-on-year.
Meanwhile, the Ukrtransgaz company announced that gas transport to Europe would not be affected by a recent incident in which Ukraine’s Soyuz trunk gas pipeline in Zakarpattia region was damaged, Interfax reported. Preparations are currently under way to repair the pipeline. Ukrtransgaz is fully controlled by the national energy company Naftogaz Ukrainy. It operates the national system of trunk gas pipelines and 12 underground storage facilities with aggregate capacity of 31bcm.