Yanukovich Promises to Lower Utility Tariffs

Viktor Yanukovich, prime minister, said yesterday the Cabinet would “definitely” decrease utilities tariffs, in response to a question about parliament’s vote last week to roll back residential utilities tariffs including gas and electricity to their levels as of January 1. However, he suggested the Cabinet was considering a smaller decrease, rather than a full roll-back, saying the Cabinet would determine “optimal” levels, and that although he supported the vote, the situation was “complicated”. Vladimir Nesterenko: As the parliament vote was an override of the president’s veto, the bill rolling back tariffs to January 1 levels is due to become law within a couple weeks after it is officially published. However, Yanukovich’s comments suggest he and his Cabinet will not hurry to implement the law. Also, although the law repeals the tariff increases implemented since January 1, it would allow the Cabinet to raise tariffs again after it raised the minimum wage and cleared wage arrears. Furthermore, the law could be canceled if the president or Our Ukraine MPs appeal to the Constitutional Court. Thus, we doubt there will be a full roll-back, but the Cabinet could restore some cross-subsidization of household gas and electricity prices.