Payment in a European way: how much will Ukraine increase the gas tariffs in the framework of the agreement with the IMF

The International Monetary Fund and Kiev came to an agreement on the gradual increase in gas tariffs for the population to the level of imported parity. The Ukrainian side promised to fulfill this requirement until April 2020. This was stated on September 18 by Andrei Kobolev, speaking at the forum of the European Business Association.

"The principle agreement on the gradual increase in price and the maintenance of the Ukrainian market for the so-called full import parity until April 2020 is," - quotes Koboleva Ukrainian news agencies.

We made concessions

At what pace will the price increase be made, the parties have yet to come to an agreement later, explained the head of Naftogaz. At the same time, he admitted that the data of Ukrainian journalists on raising the tariffs for blue fuel at the first stage by 23.5-25% are correct. Now the Ukrainian government is discussing the number of "waves" of increasing gas fees and their amounts.

Recall, the increase in quotations for natural gas was one of the mandatory conditions that Ukraine offered the IMF for the continuation of cooperation. To keep the possibility of obtaining new loans, the Ukrainian Cabinet should also review the state budget and bring it in line with the target indicators of the deficit. To reduce its expenditure, the authorities should bring the prices for housing and communal services to the market level.

To date, Kiev has received from the IMF four tranches for a total of $ 8.7 billion. The entire assistance program is $ 17.5 billion and ends in the spring of 2019. For the months remaining until the end of 2018, the Cabinet of Ministers and the National Bank of Ukraine are hoping to get another $ 1.9 billion.

In August, the government extended the old gas tariffs for the population until October 1, today 1 thousand cubic meters. m gas costs Ukrainian consumers at 6958 UAH. ($ 247.6). The cost of imported blue fuel is now about 11 thousand UAH. ($ 391.5) per 1 thousand cubic meters. m - at this rate, industrial enterprises pay for gas.

"The IMF has long called for equalizing gas prices for the population and industrial enterprises, but this will lead to collapse. The population will simply stop paying. Therefore, after lengthy negotiations, we managed to get the IMF to agree to a gradual increase in prices, now specific figures are being approved, "Naftogaz was told.

As RT's interlocutors told the company, the agency understands that a sharp increase in gas prices may lead to the opposite effect - not an increase in payments, but to the fact that the population will simply stop paying.

The president of the Center for System Analysis and Forecasting Rostislav Ishchenko told RT that many Ukrainian families can not pay for utilities today and any increase in prices will be painfully perceived by the population. Tariffs for utilities in Ukraine are now higher than in some EU countries, and wages - at the level of African countries, said the expert.

According to the State Statistics Service, in July the average salary in Ukraine was 9170 UAH. ($ 326.3), while for public services the population spends about 17% of income.

The crisis of non-payments

However, even such a "soft" option for raising tariffs causes great irritation in the country. Many believe that Ukraine could set up production of its own gas, but the authorities specifically hamper the development of Ukrainian energy.

"For the unwillingness of the country's leadership to carry out reforms, the population will pay again. Ukraine extracts gas and it could be used for the needs of the population at low prices. And thus support people. But this is unprofitable for pro-government deputies and officials. They earn well by selling gas produced in Ukraine at the prices of imported fuel, "a source in the party" Fatherland "told RT.

Even a slight increase in tariffs can lead to massive non-payments, says Rostislav Ishchenko in an interview with RT. This trend has been mounting for the last several years.

According to the State Statistics Service, as of June 30, 2018, the debts of Ukrainians for the supply of cold water and drainage reached 2.7 billion hryvnia ($ 95 million), while on January 1 the debt was 1.7 billion hryvnia ($ 60 million). During the same period, arrears for hot water and heating increased from 11.1 billion hryvnia ($ 390 million) to 11.4 billion hryvnia ($ 401 million), and for gas - from 12.1 billion hryvnia ($ 426 million) to 16.8 billion hryvnia ($ 591 million).

"More and more people are crossing the poverty line, half of Ukrainians have gone abroad. And this flow will grow, "- says Ishchenko.

The government does not have exact data on how many residents work abroad. But, according to the Cabinet of Ministers, about 5 million people work abroad.

However, according to RT source in the People's Front party, now Kyiv is just leading the IMF nose, but in fact it is not going to raise prices for the population.

"This is a cunning move of the country's leadership. At this stage, they try to promise anything, to get the IMF's fifth tranche. And gas prices will indeed rise slightly. But I'm pretty sure that then no one will be able to fulfill the contract with the creditor. These will be the problems of the new president and government, "the representative of the Popular Front party said in an interview with RT.

However, as experts say, the IMF has already become accustomed to such behavior of Kiev and operates on the principle of "in the morning chairs - in the evening money", so tranches will be allocated until Ukraine complies with the requirements of the fund and raise gas prices, Ishchenko is sure. So - the government and the president will have to fulfill all their demands, which can affect the rating of President Petro Poroshenko.

"Preparations for next year's elections began in Ukraine, so many politicians will criticize the country's leadership for the decision to raise gas prices," the expert concluded.