UKRAINE'S GAS PRICES WILL UP

REUTERS - The International Monetary Fund told Reuters on Friday Ukraine should allow the market to determine gas prices as promised under a $17.5 billion loan program, after the government extended a below-market level pricing system for households.

In 2016, Ukraine agreed to adjust gas prices to be in line with external market rates, but the government's failure to implement the decision means the IMF held back disbursing further loans since it approved a tranche last April.

There is a shrinking window for Ukraine to pass IMF-backed reforms ahead of presidential and parliamentary elections that will take place in 2019 at the latest. The current IMF program also expires in March next year.

The cabinet has now extended the pricing policy for another two months in a formal resolution published on Friday.

The IMF representative to Ukraine, Goesta Ljungman, said in emailed comments that low prices for households amounted to subsidies that were regressive and helped the largest users the most.

"We believe that it is important to let gas prices - including tariffs for households - be determined by the market, in line with the reforms that were implemented in 2016, and which were one of the major achievements of the reform process in Ukraine in recent years," he said.

He did not comment on how the government's decision affected the outlook for the next loan tranche, but the Fund has previously made clear that adjusting gas prices is a key requirement for further funding.

The Ukrainian central bank has repeatedly warned that Ukraine's economic recovery could be jeopardized if it does not receive further financing under the program.

Ukraine has received $8.4 billion so far from the Fund, helping it recover from a two-year recession following the 2014 annexation of Crimea by Russia and the outbreak of a Russian-backed insurgency in its industrial east.

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Earlier:

2018, March, 14, 11:35:00 NORD STREAM NIGHTMARES U.S. OGJ - Sandra Oudkirk, deputy assistant secretary for energy diplomacy at the US Department of State’s Bureau of Energy Resources, said Nord Stream 2 matters to the US because it would cement a transportation system in place that could perpetuate dependence on Russian gas for some key US allies. “It would not increase the amount of gas coming into Europe, only replace volumes that now are being transported through Ukraine,” she said.

2018, January, 29, 08:25:00 EBRD BOUGHT UKRAINE: $12 BLN EBRD - He noted Ukraine continued to be one of the world’s most energy-intensive countries, three times more so than the EU average, and he said the country should focus on energy efficiency, diversifying energy sources and improving municipal services and infrastructure. The EBRD President referred specifically to the need for further improvements in governance. Progress had been made but corruption was still a barrier to foreign direct investment, he said. The establishment of anti-corruption institutions could make an important contribution to increasing transparency in the economy.

2018, January, 12, 12:50:00 RUSSIAN GAS RETURNING BLOOMBERG - Ukraine imported 14 billion cubic meters of gas from the EU last year, comparable to Belgium’s annual consumption. From this year, state-owned NAK Naftogaz Ukrainy should import 5 billion cubic meters annually under its contract with Russia’s Gazprom PJSC through 2019, and has to pay for at least 80 percent of that, according to the court.

2017, December, 11, 09:35:00 IMF: UKRAINIAN CORRUPTION IMF - “I had a constructive and open discussion with President Poroshenko on Ukraine’s efforts to fight corruption, which is expected by the Ukrainian society and is critical to improve transparency and accountability and create the conditions for sustainable growth."

2017, October, 4, 23:35:00 WBG HAS UKRAINE According to the World Bank’s Special Focus Note on reforming land markets, the moratorium on agricultural land sales, along with weaknesses in the transparency of land rights and transactions, are major impediments to attracting investment and unlocking productivity in Ukraine’s agriculture sector.

2017, September, 4, 12:30:00 RUSSIAN GAS FOR EUROPE: UP TO 23% Russian natural gas volumes piped via Ukraine to European consumers are up by 23.4 percent so far this year at 61.9 billion cubic metres (bcm), Ukrainian gas transport monopoly Ukrtransgaz said.

2017, April, 7, 18:30:00 UKRAINE'S SERIOUS SHORTCOMINGS Ukraine has been urged to finalise gas sector reforms by Janez Kopac, director of Energy Community that regroups EU and non-EU states in Europe.