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The IMF is concerned that Ukraine could return to the state regulation of tariffs, something Ukraine has shifted away from with the launch of the gas market.
The International Monetary Fund (IMF) has expressed concern over a fixed gas tariff Ukraine's government introduced recently because this is in fact government regulation.
That's according to Prime Minister Denys Shmyhal, TSN reports.
"Now the IMF mission is working in Ukraine. It is considering whether these decisions affect the ability of the Ukrainian budget to fulfill its obligations to citizens and partners," Smyhal said.
"The decision does not actually affect budget sustainability. We continue our discussion with the IMF. They are worried, concerned about the return of the state tariff regulation. No. We will be working in the gas market, in the electricity market. In this case, these measures are tailored to protect Ukrainians from stock market fluctuations. We will develop an annual product that will protect citizens from unpredictable fluctuations," says Shmyhal.
Read alsoCabinet mulls fixed gas price for households
"Now they say we should assess our budget's sustainability. This is an absolutely normal thing," the prime minister added.
Answering the question, whether Ukraine will receive another IMF loan tranche, Denys Shmyhal said: "Of course. I'm positive."
Background
Yesterday, January 14, Denys Shmyhal held talks with representatives of the International Monetary Fund on the introduction of state regulation of gas prices in Ukraine.
Earlier, President of Ukraine Volodymyr Zelensky, responding to a number of rallies held in some regions, instructed the government to urgently address the issue of gas tariffs for households.
A new gas price has been in effect in Ukraine since January 1, offered by gas suppliers as part of the competitive gas market launched in Ukraine for the households. In June 2020, the procedure for changing gas suppliers for household consumers was simplified as part of the implementation of structural beacons put forward by the International Monetary Fund to pursue the Stand-By Arrangement for Ukraine.
Gas supplying companies offer to buy gas in January at a price from UAH 6.99 to UAH 10.8 per cubic meter, while the minimum price is 11% higher than that in December and the maximum price is 20.5% higher.
In addition, new tariffs for gas transmission were introduced from January 1.
The energy regulator NEURC has increased tariffs for the services of 43 gas distribution companies by an average of 1.6 times from January 2021.
Since early January, rallies against the increase in utility tariffs have been held in a number of regions of Ukraine.