Ukraine minister says IMF concerned by plan to regulate gas prices

KYIV, Jan 14 (Reuters) - Ukraine’s finance minister said on Thursday that the International Monetary Fund was concerned about the government’s plan to regulate household gas prices, although the Fund has not officially commented on the plan.

Such a plan would not help Ukraine start its currently stalled $5 billion loan programme with the IMF, Serhiy Marchenko said in a live interview on Ukrainian Radio NV.

“Our partners know about it. They are concerned that we are revising some of our earlier commitments,” Marchenko said.

IMF officials could not immediately be reached for comment.

Prime Minister Denys Shmygal said on Wednesday the government would introduce state regulation and set a uniform gas price of 6.99 hryvnia ($0.25) per cubic metre during the country’s coronavirus lockdown or throughout winter, to avoid a jump in energy bills that have already led to protests across the country.

The price of gas in Ukraine has long been a political issue, and opposition parties regularly use energy price hikes as a reason to protest against the government.

The government says gas prices took off last month and in January, with gas companies supplying the public at prices often exceeding 10 hryvnias ($0.36) per cubic meter.

“We have an obligation in the memorandum on the launching of market mechanisms in the natural gas market… These are clear commitments and they must be adhered to,” Marchenko said.

“Now the issue is to convince our partners that this step can be part of a mechanism or a temporary solution”.

Last June, the IMF approved the $5 billion loan programme and disbursed the first tranche of $2.1 billion to help the Ukrainian economy, which has been hit hard by the coronavirus pandemic.

Further loans have been frozen due to the slow pace of reforms in Ukraine. (Reporting by Natalia Zinets; Editing by Hugh Lawson)