The Cabinet postpones gas prices’ increase

UKRAINE - In Brief 29 Sep 2018 by Dmytro Boyarchuk
Yesterday, on September 28 the Cabinet one more time postponed potential gas prices’ increase, according to local news agencies. Gas prices will remain unchanged till October 18. Everyone anticipates decision on gas prices. That was demand from the IMF for the fourth review of the EFF program. The IMF mission visited Kyiv from September 6 till September 19 but left Ukraine without any comments on the results of its visit. Local media reported that the IMF added new requirement: now budget 2019 needs to be approved to receive the fifth tranche from the IMF ($ 1.9 billion). At the same time Andriy Kobolyev, CEO of Naftogaz commented to media that some agreement on gas prices was reached. Silence on both sides (the IMF and Ukrainian government) is the strangest thing we faced around the IMF negotiations ever. Even during Yanukovitch times when it was crystal clear that nothing will be done the IMF regularly delivered neutral statements telling that ‘talks continue’. Very likely the IMF simply anticipates to see some steps signaling that Ukrainian authorities do not play chickens with the Fund and really committed to comply with the requirement. The expectation was that the Cabinet will increase gas prices by October 1 thus signaling that everything goes smoothly. Now observers again are totally confused. Heating season starts on October 15 and by that time new gas prices should be approved. But the Cabinet postponed its decision till October 18. What for? Against this backdrop tension around potential deal with the IMF is growing.

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