Energy Club Urges Government Action Ahead of Difficult Heating Season, Forecasting Gas Shortage

20.05.2025

Energy Club, Ukraine’s leading business association of energy companies, has appealed to Prime Minister Denys Shmyhal with a series of urgent proposals to stabilize the gas market and prepare for the 2025-2026 heating season. The appeal was preceded by two expert online discussions held in April and May 2025, which addressed key challenges in the gas sector.

The first online meeting, titled “Ensuring Ukraine’s Gas Balance on the Eve of the 2025-2026 Heating Season,” took place on April 1, 2025. Participants analyzed risks, identified strategic priorities, and discussed ways to integrate the Ukrainian gas market with the European one, aiming to develop effective mechanisms to guarantee the country’s energy security. Key topics included assessing the projected gas deficit, factors complicating the formation of reserves, attracting investment, and restoring infrastructure.

The second discussion, “Prospects for Natural Gas Imports to Ukraine: How Businesses Can Secure Resources for the Upcoming Heating Season?” was held on May 15, 2025. It focused on available import routes, current market conditions, infrastructure capabilities, and options for long-term contracts. Participants also discussed projected gas prices for the second half of 2025 and the role of state policy in providing businesses with energy resources.

In its appeal to the Government, Energy Club expressed concern about the high probability of a natural gas deficit amounting to 4-5 billion cubic meters for the upcoming heating season. This is due to a significant decrease in domestic production (by 25-40%) caused by attacks on critical infrastructure, as well as limited import capabilities. Other challenges include growing competition for gas on the European market, limited capacity of import routes, and economically unviable tariffs in certain directions. Furthermore, the current market model, particularly the imposition of Public Service Obligations (PSO) primarily on Naftogaz of Ukraine, distorts competition and hinders domestic production development.

Energy Club recommends the Government take the following measures:

• Create favorable conditions for investment in gas exploration and production by simplifying permit procedures.
• Revise the PSO model, gradually liberalizing pricing for commercial consumers.
• Ensure a level playing field for all market participants and consider the use of financial instruments, such as futures, and long-term contracts.
• Actively work with European partners to expand physical import capacities and address issues with transit tariffs.
• Consider participation in joint European gas purchases and attracting European companies to store gas in Ukrainian underground storage facilities.
• Intensify work with international financial institutions to attract funds for purchasing imported gas.
• Ensure open communication with the public and businesses about the real state of the gas market.
• Develop clear action plans in case of a gas deficit.
• Accelerate the integration of the Ukrainian gas market with the European one.

Energy Club emphasizes that Ukraine’s energy sector requires predictability, transparent market signals, and constructive cooperation from the state. The organization calls on the Government for open dialogue and proactive measures to address pressing issues.