Coal price in Ukrainian power tariff 41% less than in Rotterdam - PM

Coal price in Ukrainian power tariff 41% less than in Rotterdam - PMUkrainian Prime Minister Volodymyr Groysman denies accusations that the tariff for electricity in Ukraine is calculated on the basis of existing coal prices at the Rotterdam port, stressing that today the coal price in the tariff is 41.2% less than the price in Rotterdam.

"I hear that the Rotterdam plus is used in the tariff now. This is not so. The price of coal in Rotterdam is around UAH 3,000 [per tonne], and in the tariff it is calculated at UAH 1.730 [per tonne]," he said at a government meeting in Kyiv on Tuesday.

"UAH 3,000 is a fake that someone is trying to thrust on Ukrainian society," Groysman said.

He said that today Ukrainian producers cannot buy coal in Rotterdam, as it is more expensive than coal on the Ukrainian market.

As reported, the National Commission for Energy, Housing and Utilities Services Regulation (NCER) late April 2016 started applying the new rules to form the forecast wholesale market price of electricity. The price was approved for Q2-Q4 2016. The new rules envisage the calculation of the coal price using the Rotterdam port (АРІ2) plus the delivery cost formula. However, this price is set as an average price for 12 months. In the conditions of a sharp rise in the price of coal in H2 2016, this average price was considerably lower than the current price in Rotterdam.

The commission took into account the АРІ2 index CIF in main ports of Western Europe in the period of December 2015 through November 2016 when the commission calculated the forecast wholesale price for 2017. The average price was $56.48 per tonne. Average freight rate to deliver coal to Ukrainian ports was $8.52 per tonne and average loading rate of $7.21 per tonne were considered. Average coal price on the European market with delivery to Ukraine was $72.21 per tonne.
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