A resuscitated monopoly consortium aspiring to replace Naftohaz Ukrayiny?
The March 9 Cabinet session might be described by the motto, “Attention: Gas.” Even prior to the official start of the working day Vice Premier Yuliya Tymoshenko met with businessmen operating in the gas market and shared her views on reform in that domain, in the form of appropriate projects. An hour and a half later, she received regional administrators responsible for energy supply payments. Very likely, they were also made privy to her projects. Finally, the Cabinet’s fuel-and- energy reform committee was convened at two p.m., presided over by Ms. Tymoshenko.
A bit earlier, she stated the official version of all this accelerated activity. Interfax Ukraine reported that the Cabinet, when working out a new gas market concept, plans to destroy the monopoly status of the “people’s joint stock company,” Naftohaz Ukrayiny, in terms of procurement, transportation, and sale of natural gas in Ukraine.
The regional gas sector will be run by an entity supposed to be named the successful bidder at a certain tender. To do so, that entity will simply have to produce property guarantees. Even now it is easy to guess that access to gas pipelines will be granted organizations created by regional authorities, ones like the Donbas Industrial Union, to exercise on-line control over gas-dollar flows.
The gas pyramid is to be topped by a specially established entity to form all-Ukraine natural gas balance and purchase gas from domestic oil companies, Naftohaz Ukrayiny, and abroad. The proceeds collected by regional gas traders (read: monopolies) will be transferred to a single bank account, to be held, of course, by an all-Ukraine monopoly.
A similar, albeit less monopolized, pattern is effective on Ukraine’s energy market today. The results are, regrettably, discouraging. There is little evidence in favor of the new option. Veteran readers of The Day should remember the Ukrainian gas resources consortium saga, Pavlo Lazarenko’s child. It was meant to finally monopolize the national gas market (at the time it was dominated by another Premier’s offspring, United Energy Systems of Ukraine). Very likely, Gas Pyramid-2 will be topped by that consortium’s “cloned brother” — if no obstacles are placed in its way. Thus, Economy Minister Serhiy Tyhypko showed little enthusiasm commenting on Yuliya Tymoshenko’s concept: “Like they say, the devil is in the details.”
