Ukraine To Raise Natural Gas Prices For Households By 30 Percent

KIEV, Ukraine -- Ukraine’s government will raise the price of natural gas for households by 30 percent this year as the country seeks to qualify for an International Monetary Fund bailout loan, Prime Minister Mykola Azarov said.

Prime Minister Mykola Azarov.

The increase will help cut the budget deficit of state-run energy company NAK Naftogaz Ukrainy to 8.5 billion hryvnia ($1.07 billion), Azarov said yesterday in remarks broadcast by private TV channel Inter.

Naftogaz’s budget will be balanced next year, Azarov said.

The country first turned to the IMF in 2008 after the global recession cut demand for its exports and the budget deficit swelled.

The nation received $10.6 billion before payments were frozen when the government declined to cut spending before presidential elections at the start of 2010.

The IMF approved a second lending program in July after Ukraine agreed to trim the shortfall and raise gas prices.

Ukraine raised the price of natural gas for households by 50 percent on Aug. 1, and said it would increase it more, according to the agreement.

Households now pay an average of 725 hryvnia ($90) per 1,000 cubic meters, compared with an average of $264 the country paid for imported Russian gas in the first quarter.

Source: Bloomberg