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Ukraine must be bold to stimulate growth in the gas sector

There is great potential still in the country’s gas sector, but Kiev must be bold if it wants to attract the investment – and players – it so desperately needs

In August 2014, Ukraine’s government more than doubled its taxes on gas production for private companies as part of a broader effort to shore up its embattled budget. The result is a combined marginal tax rate of close to 70%, putting Ukraine on a par with hydrocarbon exporting countries such as Norway, Russia and Kazakhstan. But Ukraine is not an exporter of hydrocarbons. Not any more. It is a country in the midst of a desperate gas shortage, as it continues to negotiate with Russia over gas supplies needed to cover demand for the winter. The tax increase, originally introduced as a temporary measure running until the end of the year, could now be extended indefinitely. This move, while un

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