16:19 31.01.2013

Ukraine's government ready to raise gas tariffs for some consumers, says foreign minister

2 min read
Ukraine's government ready to raise gas tariffs for some consumers, says foreign minister

Ukraine's government is open to raising gas prices for some consumers, Ukrainian Foreign Minister Leonid Kozhara said in an interview with The Wall Street Journal in Brussels.

The minister added that in such a way one of the major stumbling blocks to a new International Monetary Fund (IMF) loan deal could be removed.

Kozhara also said Ukraine wouldn't pay a $7 billion gas bill that Russian energy giant OJSC Gazprom sent its state-run energy company Naftogaz Ukrainy this week for gas Ukraine failed to import in 2012 under its 2009 contract terms.

He warned Russia that if it maintained the prices it charges Ukraine for gas, it would eventually lose a key export market.

The previous Stand-By Arrangement between Ukraine and the IMF terminated in December 2012.

In late July 2010, the IMF decided to renew its loan partnership with Ukraine through a new Stand-By Arrangement worth SDR 10 billion (over $15 billion). According to the National Bank of Ukrain, the country succeeded in getting two tranches worth a total of SDR 2.25 billion ($3.4 billion).

The program was frozen at the stage of the second review in the spring of 2011. For a year and a half, Ukraine has been unsuccessfully trying to persuade the IMF to drop its objections to the government's subsidizing natural gas tariffs for households until the completion of its gas talks with Russia.

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