Artem Petrenko, Executive Director of the Association of Gas Producing Companies of Ukraine (AGPCU), stated that the partial export of Ukrainian gas can significantly increase revenues to the state budget. According to him, the key mechanism is that the royalty for exported volumes is calculated based on the European gas price, which significantly exceeds the domestic one. This means that even if the current production level is maintained, the state will receive additional tax revenues without the need to increase production volumes.
Royalty at European Price: How the Mechanism Works
Petrenko explained that according to the Tax Code of Ukraine, companies exporting gas are required to pay royalties — a special tax — not at the domestic price established on the Ukrainian market, but at the price operating in Europe. "The state, for its part, will have more funds. Why? Because if companies export gas, then under the Tax Code of Ukraine they must pay royalties, that is, a special tax, not from the price that has currently formed in Ukraine, which is completely understandable, but at the price that is in Europe," he emphasized. Thus, the gap between the domestic and European prices automatically transforms into additional budget revenues.
Profit Tax as the Second Channel of Revenues
In addition to royalties, the growth of revenues from gas sales in export markets entails an increase in profit tax. Petrenko noted that the combined effect of the two tax mechanisms — royalties and profit tax — allows the state to receive a significantly larger volume of funds from increased gas production and sales. "This will then allow us to have, accordingly, more funds from royalty payments, accordingly, more profit tax funds, that is, the state will receive more funds from increased production," explained the AGPCU director.
Win-Win for Both Parties Under a Transparent Mechanism
According to Petrenko's assessment, provided a transparent and controlled export mechanism is in place, both parties benefit. Private gas producing companies receive guaranteed demand for a portion of the produced resource, which reduces market risks and ensures revenue predictability. The state, in turn, receives additional tax revenues necessary to finance state needs. "Private companies will have, first of all, a guaranteed demand for gas, and the state, in case of realization, will have more taxes and funds necessary for the state budget," emphasized the Executive Director of AGPCU.
Context: Gas Reserves Exceed Planned Targets
The statement about possible partial exports came against the backdrop that Ukraine, according to government estimates, may accumulate more than 15 billion cubic meters of gas by the beginning of November — a volume that, according to the Cabinet of Ministers' calculations, is sufficient to get through the heating season. At the same time, according to Volodymyr Omelchenko, Director of Energy Programs at the Razumkov Centre, the country has currently accumulated about 16 billion cubic meters of natural gas, which exceeds the planned target by more than 1 billion cubic meters. It is the presence of excess reserves that creates the prerequisites for discussing partial exports without threat to domestic energy supply.
Strategic Significance: Restoration and New Drilling
The AGPCU also stressed that controlled gas exports will provide the state not only with additional tax revenues, but also with foreign exchange earnings. For the producers themselves, export earnings will become a source of funds for restoring infrastructure after Russian attacks, protecting facilities, and financing new drilling. Thus, partial export is considered not as a one-time measure, but as an element of a long-term strategy to strengthen energy security and the financial stability of Ukraine's gas industry.
