14:30 06.07.2018

Talks with IMF on gas price for households continue - PM

2 min read
Talks with IMF on gas price for households continue - PM

The Ukrainian government continues talks with the International Monetary Fund (IMF) on the requirement to equal the price of gas for households with the higher price of gas for industry, which is one of the key requirements for receiving the new tranche from the IMF, Ukrainian Prime Minister Volodymyr Groysman has said.

"Since the summer of 2017, this [equalization of prices] was due to happen. I did not allow this increase. We are now working with the IMF, with our partners and discussing possible approaches to resolve these issues," he said in parliament on Friday.

"As soon as I have information about what we managed to achieve, I will definitely say this," the prime minister said.

He said that he does not want to raise any prices in Ukraine at all and would like to reduce them, but he should take into account the factors as the need to implement budgetary payments, service external debts and develop the economy.

"Therefore, we need the support of external partners," Groysman said, calling for consolidation in difficult times.

As earlier a source close to the Ukrainian government has told Interfax-Ukraine, Groysman has proposed to the International Monetary Fund (IMF) a new option of a compromise in the negotiations about gas prices, which envisages a package of steps, including monetization of subsidies, liberalization of the gas market and a discount from the single price of gas for ordinary consumers.

Since July 2017, Ukraine has been in a complicated negotiating process with the IMF on the gas issue: the Fund insists on raising the price of gas for households, which, according to various estimates, can range from 30% to 60%, due to rising prices on international markets, while the prime minister sees this sharp increase as unjustified.

The source said that during this period Ukraine offered the IMF at least eight options of changing the formula for gas prices, based on observance of the principles agreed upon with the Fund in due time: promoting the development of a free gas market and preventing the restoration of corruption schemes on the difference in gas prices, which flourished until 2016.

The Fund's position is quite tough, as the government last year decided to raise gas prices that allowed Ukraine to receive a tranche from the IMF, but subsequently unilaterally refused to implement it.

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