Launch of the retail gas market: what should consumers expect?

On 8 September, DiXi Group held, jointly with the NEURC, a webinar “Launch of the retail gas market: what should consumers expect?”.

During the online discussion, specialists of the gas market and journalists received expert commentaries and took advantage of the opportunity to ask questions to speakers in order to better understand the logic behind the launch of the retail gas market and the benefits for consumers and develop an own vision of the reform preparation process.

The speakers included representatives of both public and commercial/civic sectors: Oksana Kryvenko, member of the National Energy and Utilities Regulatory Commission; Artem Kompan, Chairman of the Management Board of the Association of Energy Suppliers; Maksym Rabinovych, Director of Naftogaz of Ukraine Gas Supply Company LLC; Oleksandr Ovdiienko, chief gas expert at USAID’s Energy Security Project; Roman Nitsovych, DiXi Group Research Director.

At the webinar, experts analysed the changes which Ukrainians should expect from the launch of the retail gas market. In particular, they explained the procedure of changing a gas supplier and gave advice on what consumers should do if they encounter difficulties with changing a supplier.

After opening the gas market for households, Ukrainians can choose from among a large number of suppliers in the market, Oksana Kryvenko, member of the National Energy and Utilities Regulatory Commission, said during the webinar.

In 2019, there were 249 gas supply companies in Ukraine, 37 of which supplied gas under special obligations. In 2020, when the special obligations were abolished effective 1 August, households received access to a large number of suppliers. Therefore, consumers now have a choice.

“The license issuance and revocation process is dynamic, and the number of suppliers may change from week to week. However, consumers definitely have the choice of more than 230 suppliers. I hope that all suppliers will compete for consumers, providing better-quality and cheaper service,” Oksana Kryvenko said.

The discussion also touched upon the peculiarities of preparing the very companies which intend to supply gas to households.

There are almost 40 active suppliers on average in the national market. But at the same time, the volume of the market is not always the determining factor for the number of suppliers. The majority of suppliers are small market participants, as there are only 3-6 serious players in the market, DiXi Group Research Director Roman Nitsovych said in his speech.

The expert also commented on the structure of gas price in Ukraine. “In our country, over 70% is the gas price in the wholesale market. We are more dependent on market fluctuations than other countries, where taxes and other charges have a greater share of the price,” Roman Nitsovych said.

Most speakers stressed the importance of informing consumers about the new rules of the game in the gas market.

“Today, only 30% of consumers heard about reform of the gas market and that they can change the gas supplier they presently have. The more offers from various suppliers, advertising and explanations will be available, the more awareness of the reforms people will have. In that case, there will be more of those willing to change,” Artem Kompan, Chairman of the Management Board of the Association of Energy Suppliers, said.

When answering the question about the lack of information regarding the changes in the gas market, experts noted the first brochure about the new gas market, released shortly before the webinar by DiXi Group: Gas Market for Ukrainians. User’s Instruction. This publication, prepared with the support from USAID, explains how consumers can now select a supplier, where to look for gas price offers and what documents are required for that.

The webinar was organised as part of USAID’s Energy Sector Transparency project implemented by DiXi Group.

Source: DiXi Group