Ukraine's President-Elect Calls For Talks With IMF To Lower Natural Gas Price [GGP]
Ukrainian President-elect Volodymyr Zelenskiy has called on the government and the state energy company Naftogaz Ukrainy to hold talks with the International Monetary Fund (IMF) in order to lower the household price for natural gas as of May 1.
Ukraine raised household gas prices sharply ahead of the winter in October and secured a new $3.9 billion standby aid agreement with the IMF, whose support has been crucial for Kyiv amid economic struggles and a war with Russia-backed separatists who hold parts of eastern Ukraine.
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In a statement on Facebook on April 24, Zelenskiy's transition team said that lower prices in Europe in recent months should enable Ukraine to set lower prices for its citizens.
Prime Minister Volodymyr Hroysman's cabinet and Naftogaz have already agreed between themselves on a small decrease starting May 1 -- instead of the 15 percent increase that had been planned.
The Facebook statement suggested that Zelenskiy -- who is to be inaugurated in early June after easily beating incumbent President Petro Poroshenko in an April 21 runoff -- supports a price cut but wants to ensure it is agreed with the IMF.
"Let's show -- not just in words but in deeds that we can take decisions in people's interests. 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 statement said. It urged Naftogaz and the cabinet "to hold the appropriate consultations with the IMF" and agree on a price decrease to take effect on May 1.
The statement warned that neighboring Russia could limit energy supplies to Ukraine from June 1 and might take steps to halt gas transit through Ukraine altogether at the start of 2020. Such moves by Moscow would result in significant financial losses and gas supply risks, it said, adding: "These challenges require us to take effective and fast action."
An IMF spokesman was not immediately available to comment.
Sensitive Issue
Gas prices have been a sensitive issue for years in Ukraine, and just one of many that Zelenskiy -- a comedian who plays a president on TV but has never held office and had no political experience before the election campaign -- will face as president of the country of some 44 million.
There was additional political context to the Facebook statement: It came less than 48 hours after Hroysman, who has been prime minister for three years, said he will take part in parliamentary elections due in October with a party other than Poroshenko's political grouping. The elections will be an important test for Zelenskiy, whose weeks-old political party does not have seats in parliament.
Hroysman said in March that he would urge the Finance Ministry and Naftogaz to start talks with the IMF to try to prevent any future rise in gas prices.
He told a cabinet meeting on April 24 that the planned decrease on May 1 - a cut of about 3.5 percent, to 8,247 hryvnyas ($309) per 1,000 cubic meters -- would not be the last.
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