“My work in the Yanukovich team is going well”: interview with Ukrainian Fuel and Energy Minister

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In an interview to REGNUM Ukrainian Fuel and Energy Minister Yuri Boyko tells how his Ministry solves the key energy problems of Ukraine.

REGNUM: Will your ministry manage to make the country ready for the autumn-winter season and to ensure uninterrupted energy supplies this year?

Uninterrupted energy supply of consumers is the key function of our Ministry. We will do our best to prevent tragedies similar to the last year’s situation in Alchevsk. The vertical of power is exactly for compelling local authorities to supply their people with heat. People must not become hostages to negligent officials.

However, the government can influence this situation only if the payment discipline is high. That’s why our task is to ensure 100% payment for fuel. In this light, we welcome the efforts of Kievenergo and Gas of Ukraine to resolve their conflict. I think that Kievenergo’s starting to repay its debts for supplied gas is a positive signal that the heating season will go off smoothly.

REGNUM: How will you raise the transfer capability of the electric lines between the united energy system of Ukraine and the Crimea?

Today the lines are working at their full capacity. In fact, we have limited ways to raise their capacity, so, I think the Crimea should develop its own power generation system.

REGNUM: How are you going to bring Naftogaz out of its deep financial crisis?

You are right, they are actually in a crisis, but we are already implementing an anti-crisis program. First, we are revising the company’s current expenses with a view to reduce the costs. Second, in August the company intensified its work to restructure the payables of debtor-companies.

Of course, this requires response steps on the government’s part. Particularly, they might reduce the tax burden on Naftogaz Ukraine. Presently, the company pays to the budget 20% of its gross income. The government is already working to this end.

REGNUM: Have you taken any significant steps after the signing of the memorandum between the owners of oil assets and the Cabinet?

A few days ago our ministry considered forming an expert-analytical group comprising representatives of the government and oil and oil product companies. This group is the first result of the memorandum. It will constantly monitor the sector and will coordinate positions, particularly, those concerning legislation.

We will shortly present first bills for stimulating oil processing in Ukraine: bills exempting oil processing companies from duties and taxes for the equipment they import for reconstructing, modernizing and constructing new facilities. This is the second result.

The third result is stabilization of oil product prices. Accurate calculations and ability to come to terms are the key basis of price stability. The task of the state is to prevent price speculations on the market and to give companies guarantees that their investments in Ukraine will be protected. Now the world oil prices are tending to drop due to seasonal decline in the demand. That’s why in Sept we expect that our partners will even to reduce the prices a bit.

In other words, we are holding a working dialogue and this is the most important results after administrative pressure on business or negligence of its interests in the past.

REGNUM: How can you characterize the Russian-Ukrainian gas relations?

After achieving a compromise in Sochi, the sides are normally working to coordinate the details. We will shortly formalize the agreement on the price till the end of 2006 and will, afterwards, outline parameters for the next year. I hope that we have realized that no gas or other business is possible without due regard for the interests of all parties involved.

REGNUM: On what terms are you going to cooperate with Turkmenistan?

We are going to be strategic partners, but, first of all, we are going to solve all our problems, primarily, we will repay our debts for supplied Turkmen gas. The remaining debt is quite small, and we are going to repay it very shortly. This debt should not cloud our traditionally good relations with Turkmenistan.

REGNUM: Will Russia and Ukraine cooperate for persuading Turkmenistan to reduce or not to raise the gas tariff?

We are negotiating with our partners in Russia and then we will go to Turkmenistan. It is early yet to speak about results though I am sure that the gas supply contract with Turkmenistan will be resumed.

REGNUM: How do you like you work in the government of Yanukovich?

I think that the appointment of Viktor Yanukovich as Ukrainian Prime Minister has put an end to the long war of elites that did not stop even after the “orange revolution.” His government is the result of a compromise between the political forces seeking to restore the country’s economic growth and to unite the Ukrainian nation. It is good to work in such a team.