World Bank Expects Ukraine To Keep Gas Price Hike Promise

ISTANBUL, Turkey -- The World Bank expects Ukraine to raise gas prices as the government promised, the organisation's vice president for Europe and Central Asia said on Saturday.

Philippe Le Houérou

Ukraine failed again to raise domestic gas prices as of Oct. 1, despite promising the International Monetary Fund and the European Union it would do so in exchange for loans and to help its own budget.

"They (domestic gas prices) are defacto subsidised, and Naftogaz year after year has a defacto deficit that has to be covered," World Bank vice president Philippe Le Houerou told a news briefing.

"One of the key measures we all agreed with the government is to increase the tariffs. It's a difficult measure but there was an agreement. Yes, we expect they will raise the prices."

Raising household gas prices on Sept. 1 and utility prices on Oct. 1, both by 20 percent, had been a condition of the IMF's $16.4 billion bailout package and under an EU-brokered $1.7 billion gas infrastructure loan.

Source: Interactive Investor