IDEAS home Printed from https://ideas.repec.org/a/eip/journl/y2017i1p128-145.html
   My bibliography  Save this article

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

Author

Listed:
  • R. Yukhymets

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.

Suggested Citation

  • R. Yukhymets, 2017. "On some peculiar features in the introduction of the "entry-exit" tariff model on Ukrainian natural gas market," Economy and Forecasting, Valeriy Heyets, issue 1, pages 128-145.
  • Handle: RePEc:eip:journl:y:2017:i:1:p:128-145
    as

    Download full text from publisher

    File URL: http://eip.org.ua/docs/EP_17_1_128_uk.pdf
    Download Restriction: no

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eip:journl:y:2017:i:1:p:128-145. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Iryna Bazhal). General contact details of provider: http://eip.org.ua/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.