Gas price may increase in Ukraine after Nord Stream-2 launch – Zelenskyy

The launch of Russia's Nord Stream-2 gas pipeline could provoke rising gas prices in Ukraine.

President Volodymyr Zelenskyy stated this during an interview with journalists from the Normandy 4 countries and the United States, according to the press service of the President's Office.

It is also noted, Zelenskyy stressed: such a situation may arise because of the reduction of gas transportation by the Ukrainian natural gas transmission system.

"Volodymyr Zelenskyy stressed that our country would lose about $2 billion a year from the cessation of gas transit through its territory. In addition, gas prices may rise for Ukrainian consumers, as the Ukrainian pipeline will transport less fuel," the OPU said.

In turn, Volodymyr Omelchenko, director of energy programs at the Razumkov Center, also believes that the increase in gas prices in Ukraine after the Nord Stream 2 launch is real, although he emphasizes that this may not happen.

"The launch of the Russian gas pipeline will, first, force Ukraine to create a new scheme for transporting natural gas; and it costs a lot of money. Second, without transit volumes, the natural gas transmission system provider will incur serious losses, which can be compensated only by increasing the tariff for domestic consumers. Third, the scheme of natural gas exports to Ukraine may become more complicated. Altogether, this can really lead to higher gas prices for Ukrainian consumers," Omelchenko explained in a comment to Rubryka.

At the same time, he stressed it was very difficult to predict how much gas prices would rise after the Nord Stream-2 launch, as "everything depends on the situation on international exchanges." However, Omelchenko emphasizes, in Ukraine, the costs of gas transportation will definitely increase, which will lead to its rise in price for consumers as well.

"Besides the actual gas transportation, the natural gas transmission system provider will need to dismantle pipes or maintain the system, change the supply scheme. Altogether, this may lead to an increase in transport tariffs by 20%. And this will lead to an increase in total gas prices by 5- 6%," Omelchenko estimates.

However, he emphasizes that if world gas prices fall, the launch of Nord Stream 2 will not lead to higher prices in Ukraine: "In Ukraine, there is a link to the international exchange. And if prices fall there, then our prices may fall."

"The real problem of zero transit is not the final price of gas, which is the result of many variables, but the fact that the scheme of gas supply to consumers will be complicated; because it will be very difficult to maintain pressure in the pipeline if gas is transported from Ukraine's western border to Mariupol or Dnipro, for instance. And these are serious technological costs," Omelchenko summed up.

Volodymyr Zelenskyy stated that Ukraine should use the time needed to launch Nord Stream 2 to protect its interests and energy security.