Ukraine, IMF close to agreeing on gas price issue, Naftogaz CEO says

The Ukrainian government has reached a principal
agreement with the IMF that natural gas prices for households will be gradually
increased to import parity level by 2020, Naftogaz CEO Andriy Koboloev said on
Sept. 18, according to Interfax-Ukraine. “There is a preliminary compromise,”
he said, adding that details are being discussed. He also confirmed that
natural gas pricing is the key issue of the government’s discussion with the
IMF mission that is visiting Ukraine now.

Recall, the issue of residential gas prices (which are
far below the import parity level insisted by the IMF) is the key impediment
for Ukraine to receive the next IMF tranche under the EFF program. Ukraine had
committed to bring prices closer to import parity level March 2017, before it
received the fourth tranche under the EFF program, but later on refused to
implement its commitment. Earlier this month, PM Volodymyr Groysman expressed his expectation on
finalizing talks on the gas issue with the IMF by the end of September. Last
Saturday, he confirmed the price will be increased.

Alexander Paraschiy: The IMF
mission in Ukraine, which started on Sept. 6, is scheduled to be completed on
Sept. 19. That means little time is left for the Fund and the government to
reach final agreement on the schedule of gas price hikes for households. We
remain optimistic about a compromise on the gas issue and Ukraine staying
within the IMF program, which is necessary to secure foreign currency liquidity
for the next two years.