Coal price at import parity is commercially justified — people’s deputy

According to Maxim Efimov, the social function for Centrenergo is to support state-owned coal mining enterprises
Pricing for coal on the basis of import parity (price at the hub plus delivery to Ukraine) is commercially justified for the Ukrainian market.

This was announced by the People’s Deputy Maxim Efimov, reports RBC-Ukraine.
«The question is not simply on the plane: parity is good or bad. I think that parity is the commercial part. The social part is what the state sets before Centrenergo as a state company, goals and objectives,» the people’s deputy said. commenting on the signing by Centrenergo of a contract for the purchase of coal according to the Rotterdam + formula.

According to him, the social function for Centrenergo is to support state-owned coal mining enterprises.

«If it has a social function, then it must buy coal from state mines. The only thing is that the pricing can be different, because the function is social, and this is the support of miners, it is included in the price,» added the people’s deputy.
Efimov called the price of UAH 1,650 / t under the Centrenergo contract close to the lowest import price.

In his opinion, the state should today stimulate production at state mines so that it would be possible to refuse coal imports altogether.

As a reminder, on July 10, on behalf of the Office of the President of Ukraine and with the mediation of the Ministry of Energy, the state-owned company «Centrenergo» signed a contract for the purchase of Ukrainian coal at the import parity price calculated using the «Rotterdam +» formula.

The «Rotterdam +» formula was used to calculate the cost of coal to establish the projected cost of electricity exclusively for industrial consumers in the period 2016-2019.

The formula was canceled on 1 July 2019 with the introduction of the electricity market. After that, the price of coal and electricity for the industry increased.

The government of Aleksey Goncharuk introduced, and the government of Denis Shmygal approved in a memorandum with the IMF a similar approach to determining the price of gas for the population — «Amsterdam +». It also includes the cost of delivering gas from the Netherlands — TTF exchange.

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