The International Monetary Fund (IMF) says gas and utilities tariffs in Ukraine will be fully liberalized and brought in line with market rates no later than April 1, 2017, according to an IMF report released on Monday, October 3.
Until the full liberalization of tariffs, the Ukrainian government is expected to introduce ”a quarterly adjustment mechanism to ensure that [the] tariffs do not deviate significantly from cost recovery should international gas prices or the exchange rate change,” the IMF said.
Continued progress on corporate governance reforms at Naftogaz will help to further promote transparency and good governance, according to the IMF.
As UNIAN reported earlier, the policy of a gradual increase in tariffs was initiated by Ukraine`s ex-Prime Minister Arseniy Yatsenyuk. It aims at streamlining operations of the country`s utility companies, as well as bringing utility bills in line with energy costs.
It was initially planned that higher tariffs would be phased in within two years – from 2015 until March 2017. However, in May 2016 the new government chaired by Volodymyr Groysman decided that gas tariffs for households and its cost should be aligned. In the light of this decision, heating and power tariffs were also raised.
At the same time, the government has introduced subsidies for the most vulnerable groups of the population. It has estimated that up to nine million Ukrainian households out of the 15 million registered in the country may apply for housing and utilities subsidies by the start of the 2016-2017 heating season.
