Gas tariffs for the population will not be increased

The government is still negotiating with International Monetary Fund (IMF) on resumption of cooperation and seeks to find the optimal solution for the financial deficit of NAK Naftogaz Ukraine, without having to increase gas tariffs for the population, the Information-Analytical Bulletin of the Cabinet of Ministers of Ukraine informs.

Deputy Prime Minister Yuriy Boyko says actions being taken by Ukraine in the framework of Energy Community membership represent an important step in this direction. In particular, they are related to development of competition on t gas market and liberalization of gas supplies.

"NAK Naftogaz Ukraine has significantly reduced the cost of gas purchased from Russian Gazprom under the contract signed by previous government. In pursuance of task assigned by President Viktor Yanukovich, procurements have been reduced by four times. This achievement is very important for us, as it results in significant reduction of losses in the national economy," Boyko said. 

He believes that population of Ukraine should not be liable with their own money for ther gas contract signed with Russia in 2009. Therefore, the Cabinet is planning to introduce the differentiated gas tariffs for population for the next 3-5 years.

"Ukraine's government should support the poorest population. It is unfair to make people pay the gas price set by Russia. In countries provided with own gas, its real price is 100-150 USD per 1,000 square cubic meters,” Boyko said. 

Government experts say the statement on introduction of differentiated gas tariffs for population means that Ukraine and IMF were reaching an understanding during negotiations on loan a allocation. The IMF previously insisted that Ukraine increase the gas tariffs for population, while the government and president categorically refused. 

Differentiated rates may represent a compromise between reluctance of Ukraine to raise the gas price for population and the IMF requirement to reduce the imbalance of NAK "Naftogaz Ukraine," the state gas monopoly that compensates between the high purchase and low sale tariffs for gas to population.

Due to the fact that Ukraine has to buy gas from Russia at an inflated price, the wholesale price of natural gas supplied by "Naftogaz" to thermal power plants is 4,700 UAH per 1,000 m3. Meanwhile, this gas is sold to population for 1,309 UAH per 1,000 m3.