According to the Ukrainian association of metal producers Metallurgprom, Ukrainian steelmakers could face losses from operations due to the increase as of August 1st 2010 the ceiling price on natural gas for industrial consumers and budget funded organizations by 9.76% to UAH 2,187.2 per 1,000 cubic meters excluding VAT, surcharges, transportation, distribution and supply costs.
Mr Vasily Kharakhulakh general director of Metallurgprom said “This measure may set to nil the profitability of the steel producing companies. The steelmakers have not seen yet such high gas prices.”
He said that the decision of Ukraine National Electricity Regulatory Commission to increase gas prices for industrial consumers differs from the initial promises of the government to support domestic producers.
Up to July 1st 201i Ukrainian steel producers had received gas at preferential prices under a previously signed memorandum of understanding with the country cabinet of ministers.
As of August 1st, Ukraine has also raised domestic household gas prices by 50%. Increasing gas prices was a key demand of the International Monetary Fund in exchange for the approval in the previous week of a USD 15 billion loan over 2.5 years to help Ukraine with economic reforms. (Steelorbis.com)
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