Government Asks IMF For Natgas Hike Delay

KIEV, Ukraine -- Ukraine asked the International Monetary Fund, again, for permission to postpone indefinitely a measure hiking natural gas prices for households by 50%, Prime Minister Mykola Azarov said Tuesday.

Repeated delays implementing the measure, due April 1, earlier this year led to a postponement of at least a $1.5 billion installment from the IMF.

“We asked the IMF to postpone this measure until we put everything in order here,” Azarov said in an interview with Pershiy television. “This is a normal, real request.”

The Washington-based lender had clearly indicated that gas price hike was needed for the lending to resume.

Another important legislation needed for the resumption of lending is pension reform that gradually increases retirement age for women to 60 years from 55 years.

Lawmakers voted Tuesday to include the legislation into the agenda to be debated in Parliament this week.

President Viktor Yanukovych has been quietly working with Regions Party and independent lawmakers to make sure the legislation is approved this week, opening way for the resumption of lending by the IMF.

The IMF suspended its $15 billion lending program for Ukraine since March delaying its installments after the government had refused to hike gas prices for households by 50% on April 1 and also postponed the pension reform that increases retirement age for women.

Top government officials have been sharply split on whether Ukraine needs to resume borrowing from the IMF, with Azarov maintaining that the country could do without the IMF money.

Deputy Prime Minister Serhiy Tyhypko said earlier this month that the failure to resume the IMF borrowing would have catastrophic consequences, including the possibility of default.

Tyhypko’s concerns echoed those made by Serhiy Arbuzov, the governor of the National Bank of Ukraine.

Source: Ukrainian Journal