Ukraine to quadruple gas transportation fees for domestic customers

Ukraine will quadruple gas transportation fees for domestic customers from January 1 to compensate for lost revenue caused by the expiry of the agreement on Russian gas transit to Europe. Reuters reported this today, citing Ukrainian officials.

Ukraine’s energy sector regulator has approved an increase in the fees to around 502 hryvnias (nearly 300 Kč) per 1000 cubic metres of gas, up from 124 hryvnias.

“In 2024, 85 percent of our revenue came from transporting gas from the Russian Federation. This means that domestic customers accounted for only 15 percent,” said Dmytro Lyppa, head of Ukraine’s gas transmission system operator.

He noted that the increase in domestic fees would only partly make up for the loss of transit revenue.

According to Reuters, Ukraine’s revenue from Russian gas transit currently stands at around $800 million to $1 billion (about 19 to 24 billion Kč) a year. Last year, Russia supplied around 15 billion cubic metres of gas to Europe via Ukraine.

The agreement on Russian gas transit to Europe expires at the end of this year. Kyiv has said for some time that it does not intend to extend the agreement. It cites the armed conflict with Russia in particular, saying that Russia partly finances its war effort in Ukraine by selling commodities.

Slovak Prime Minister Robert Fico has criticised Kyiv’s decision not to extend the agreement on Russian gas transit. Last week, he threatened Ukraine with retaliatory measures, including cutting off electricity supplies, if Kyiv halts the transit of Russian natural gas to Slovakia after the New Year.