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IMF demands Ukraine raise gas price to market level

Source : 112 Ukraine

Ljungman did not say anything on how the state’s decision influenced the allocation of the next credit tranche, but the IMF made it clear that the redemption of the promise to set gas prices on the market level is the main condition for the funding
14:32, 31 March 2018

minfin.com.ua

Ukraine has to allow the market to set gas prices. Goesta Ljungman, the Head of IMF Delegation in Ukraine stated this on March 30, as Reuters reports.

It was noted that the “reform window” in Ukraine is rapidly closing amid the 2019 presidential and parliamentary elections. The reforms are supported by the IMF. The current Fund’s program expires in March 2019.

The Cabinet of Ministers determined the price policy for two more months in the official resolution published on March 30.

Ljungman informed, that low gas prices for the households are equal to the subsidies, which were regressive and helped the largest consumers most.

“In our opinion, it is important that the market determine gas prices, including the tariffs for communal services, according to the reforms, which were introduced in 2016. This was a major breakthrough in the reform process in Ukraine within the last couple of years,” he said.

Ljungman did not say anything on how the state’s decision influenced the allocation of the next credit tranche, but the IMF made it clear that the redemption of the promise to set gas prices on the market level is the main condition for the funding.

Earlier, the Cabinet of Ministers decided not to raise gas prices for the population till June and extended Naftogaz’s public service obligations for two months at the session on March 26.

Therefore, the gas price for the population and district heating company will not change till June 1 and will remain around $190 per cubic meter for the final consumer including the VAT and other levies – around $266 per cubic meter. The public service obligation of Naftogaz expires on April 1.

Related: Gazprom appeals arbitrage ruling in dispute with Naftogaz regarding gas supply

Related: Britain seeks to replace Russian gas, - May

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