On some peculiar features in the introduction of the "entry-exit" tariff model on Ukrainian natural gas market

Abstract

The article considers the prerequisites of transformation of the national natural gas market and describes the main motivating factors determining the direction of reforms in its sectors. The topicality of implementing the model "entry-exit" on the gas market is examined both in the context of Ukraine's international commitments, and in the context of a series of crisis phenomena that have emerged in the sector of servicing and transportation of natural gas. The change of the market model in the sphere of gas transportation predetermines the principles of tariff formation for the services provided by the GTS operator. This determines the necessity of justification of the components in the system of tariff formation, such as: regulation of projected costs, amortization, regulatory base, regulatory phase of the standard income of transportation operator. The article analyses the experience of adjusting these components in other European countries and provides relevant recommendations for the national market. It is shown that such changes fundamentally transform the national market of natural gas. Transition from "investment plus" to the regulation of standard income means that operator's income on inserted investments, considering the level of expected investment risks, is sufficient for providing updating and development. The change of regulatory phase allows improving the predictability and creating prerequisites for involving new investments for long-term projects. The review of the methodology determining the regulatory base allows establishing a market price for the transport operators' main assets and making fully-fledged amortization deductions. It will give an opportunity to involve additional funds for renewal of the infrastructure and, based on the new price, establish objectively determined level of profitability of the transport operator in accordance with the new rates of spending, which are correctly accounted for and covered by the tariff rate. Determination of a compulsory rate of increasing annual performance creates prerequisites for reducing the costs and final tariff for the consumers. Analyzing the barriers to the implementation of "entry-exit" tariff model in Ukraine, author gives some recommendations for the adaption of transit agreements to the new conditions of the national market, determining trade zones, and removal of the current infrastructural and institutional restrictions, which hinder the model's implementation.