UEEX adapted the methodology for determining the price corridor for transactions that form marginal prices

In order to prevent the influence of short-term standardized products (SSP) on the weighted average price by concluding transactions at prices different from market prices, a price band was established at UEEX LLC, linked to the prices of the European hub. Significant fluctuations in spot prices for natural gas in European markets and the loss of domestic price level compliance with European ones became a factor in changing the methodology for including agreements in the weighted average price of the SSP. Indeed, according to this price, the marginal prices for buying and selling natural gas are formed.

Thus, the Quotation Commission of UEEX LLC decided to establish a price corridor for agreements to which the GTS Operator of Ukraine is not a party, in accordance with the value of Argus Ukraine VTP Month Ahead instead of Argus Germany VTP (THE) Day Ahead, and additionally introduced a price corridor from the value of the weighted average price of the SSP of the previous day. The limits of both price corridors are determined in the amount of +/-10% of the specified benchmark for the current gas day. Changes to the Methodology for calculating quoted prices and other trading indicators on the Ukrainian Energy Exchange come into force from the beginning of the gas day (from 7:00 am ) on July 8, 2022.

“Adaptation of the price corridor is the most important issue at the present time. Indeed, as a result of the fact that the price level of the domestic market is significantly lower than the price level of European hubs, the prices of many transactions that are close to domestic indicators do not fall into the corridor, and sharp fluctuations in the Day Ahead indicator exacerbate the problem. We considered several options for changing the price corridor. The chosen version of the amendments to the Methodology will help to form a stable and representative price indicator of the domestic natural gas market, which will be used to calculate the marginal prices for the purchase and sale of natural gas in accordance with the GTS Code of Ukraine,” – commented on the changes Chairman of the Quotation Commission, Volodymyr Briukhovetskyi.