Ukrainian President-elect calls for IMF talks to lower gas prices for households

File photo. Ukrainian Presidential candidate Volodymyr Zelenskiy reacts at the briefing after the announcement of exit-poll during the Ukrainian presidential elections in Kiev, Ukraine, 21 April 2019. [Stepan Franko/EPA/EFE]

Ukrainian President-elect Volodymyr Zelenskiy’s team on Wednesday (24 April) called on the government and state energy company Naftogaz to hold talks with the International Monetary Fund on lowering household gas prices from 1 May.

In one of his first policy moves since winning a landslide election victory on Sunday, Zelenskiy’s team advocated lower gas prices, though it wants the IMF, which is helping Ukraine with a multi-billion-dollar loan programme, on board, too.

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The IMF, which has said it wants to see gas prices set at their market level, declined to comment.

Zelenskiy, who has yet to take office, said in a statement on his team’s Facebook page he wanted prices to be lower, something the government and Naftogaz have already agreed between themselves.

“Let’s not just in words, but in deeds show that we can take decisions in people’s interests,” the statement said. “For the past four months, gas prices in Europe have been decreasing and now the price of gas for the population in Ukraine is higher than the price of gas on the European market.”

The same statement warned that neighbouring Russia might limit energy supplies to Ukraine from 1 June, and that, from 1 January, Moscow might move to halt gas transit through Ukraine altogether, a move it said would result in significant financial losses and gas supply risks.

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German Chancellor Angela Merkel said today (10 April) that plans for a controversial second underwater pipeline to bring gas from Russia could not go forward without Ukrainian involvement in overland transit.

“These challenges require us to take effective and fast action,” the statement said.

Prime Minister Volodymyr Groysman said in March he would urge the finance ministry and Naftogaz to start talks with the IMF to try to prevent any future rise in gas tariffs.

The government raised gas prices by nearly a quarter in October, allowing it to secure a $3.9 billion stand-by aid agreement with the IMF.

According to a previously adopted government resolution, gas prices were due to rise 15% from 1 May. But earlier this week, the government and Naftogaz agreed a slight decrease in tariffs.

Naftogaz said prices would fall by around 3.5% to 8,247 hryvnias ($310.56) per 1,000 cubic metres from 1 May.

Groysman told a government meeting on Wednesday that the price cut would not be the last.

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Ukrainian lawmakers passed the 2019 budget early on Friday (23 November), taking a crucial step to unlock $3.9 billion of loans from the International Monetary Fund to tide over a choppy election period next year.

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