Ukraine's Cabinet postpones gas prices rise for households

The Cabinet of Ministers of Ukraine has decided to postpone a rise in prices of natural gas for households, which were due to be increased from April 2018.

The relevant resolution was adopted at a government meeting on Wednesday, March 28.

Read alsoNaftogaz to raise gas prices for industry from April 1According to the explanatory note, the document provides for the extension of special public service obligations (PSO) of National Joint-Stock Company Naftogaz of Ukraine with regard to gas sales to the regional gas companies and district-level central heating providers without change of price until June 1, 2018.

The authors of the resolution note that negotiations with the International Monetary Fund (IMF) on raising gas prices are under way. Noteworthy, Naftogaz's PSOs expire on April 1. Therefore, there was a need to extend them.

As UNIAN reported earlier, gas prices for households are set at UAH 6,958, or US$263, per 1,000 cubic meters. It is UAH 4,942, or $187, excluding VAT and transportation costs.

The issue of gas prices for households is the subject of talks between Ukraine and the IMF. The IMF insists that gas prices on the domestic market be adjusted (raised) to achieve parity with the price of imported gas. At the moment, bringing the prices to import parity corresponds to a 30% increase.

According to an UNIAN source, as part of the talks with the IMF, the government proposed several options for a gradual gas price increase. However, the IMF rejected them.

Ukrainian Prime Minister Volodymyr Groysman earlier stated that Ukraine was not yet able to cope with the debt burden independently. Therefore, there is a need to continue cooperation with the IMF. The key requirements of the IMF in this regard are the creation of an independent anti-corruption court consistent with the recommendations of the Venice Commission, as well as bringing gas prices to import parity.