* Presidential aide targets skyrocketing subsidies
* Household gas prices must rise, Naftogaz chairman says
* IMF visit adds pressure to reform
* Naftogaz sees new deal with Gazprom in early 2015
(Combines stories, adds detail)
By Sam Wilkin and Marc Jones
LONDON, Dec 9 A representative of Ukrainian
President Petro Poroshenko called for state energy company
Naftogaz to be privatised and gas prices to rise as the country
grapples with a growing budget deficit and dependence on Russia
for gas imports.
"Naftogaz needs to be privatised," Dmytro Shymkiv, the
president's deputy chief of staff said at a Ukrainian investment
conference in London on Tuesday.
"We need to absolutely increase gas prices in the supply
chain for both private consumers and commercial consumers."
He said subsidies to Naftogaz were skyrocketing but that
some politicians and much of society would resist moves to price
Naftogaz is a significant burden on Ukraine's finances. The
finance ministry has had to borrow $6.4 billion via the sale of
hryvnia-denominated domestic bonds to recapitalise the company
this year and help it pay off debts to Russia's Gazprom
The Russian state-owned gas exporter cut off Ukraine's
supplies in June, and Ukraine's supply over the winter depends
on its ability to make payments to Gazprom under the terms of a
deal made in October..
Naftogaz Chairman Andriy Kobolev said Ukraine had to reduce
energy consumption and that meant cutting subsidies for
Otherwise, he said, "there will be no incentive for anyone
to save gas. Why would you care if it's dirt cheap?"
He said consumption also could be reduced by targeting
corruption in the gas industry, which he described as "the most
corrupt in Ukraine".
The government is under pressure to enact reforms from the
International Monetary Fund, which visited Kiev on Tuesday to
discuss Ukraine's progress under a $17 billion bailout
It has so far received two tranches totalling $4.6 billion,
but the country sorely needs the next payment of $2.7 billion to
support foreign currency reserves, which are at a 10-year low
due to gas debt repayments to Russia and efforts to support the
For now at least, Ukraine relies on Russian gas. Kobolev
said that Naftogaz would have to hold new talks with Gazprom
over their gas supply deal at the start of next year.
He said that with Gazprom sticking to its promise to supply
gas and with Naftogaz also paying its bills, he hoped a new deal
would cut prices from their current level of $375 per thousand
"There is a good chance that Gazprom will be more willing to
reach a commercially fair and transparent agreement on (the) gas
price and volumes for Ukraine."
(Editing by Pravin Char and Jane Baird)