Ukraine mulls talks with IMF to halt gas price hike for households

The prime minister instructed Naftogaz and the Ministry of Finance to initiate the negotiations.

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On Friday, March 15, during the Government Q&A in the Verkhovna Rada of Ukraine, Prime Minister Volodymyr Groysman announced his intention to instruct Naftogaz Ukraine together with the Ministry of Finance to start a working discussion with the IMF on the gas issue.

The discussion will aim to prevent a rise in gas prices for the households.

The basis for starting the discussion is a letter sent by Naftogaz CEO Andriy Kobolyev to the prime minister, which refers to the possibility of reducing gas prices. In particular, the document states that the price that a competitive market offers to Ukrainian households will be “lower than the current regulated price”.

Also, the head of government told reporters that, if Naftogaz could sell gas cheaper, he would fully support such decision.

"The upper limit is UAH 8,55, while everything below that I welcome," said Groysman.

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He made it clear that Naftogaz would have government support in negotiations with the IMF in the matter of turning down the idea of raising gas prices for the households.

UNIAN memo. In accordance with the resolution of the Cabinet of Ministers of Ukraine on the introduction of the regime of “special obligations” (SO), the price of gas for the households currently amounts to UAH 8,550 per 1,000 cubic meters, and from May 1, 2019, it must be increased to UAH 9,852. At the same time, last week, Naftogaz sent the head of the government a letter signed off by Kobolyev, stating that the company purchased gas at the Slovakia point at a price equivalent to UAH 5,981 per 1,000 cubic meters. Taking into account VAT and expenses for transportation and delivery, this corresponds to a retail price of approximately UAH 8,380. In this regard, NJSC Naftogaz separately stressed that for the first time during the SO regime, the gas purchase price in the European market fell below the level stipulated by the Cabinet decree on the SO regime.

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