IMF to open new lending program for Ukraine

The price of gas may increase by 23.5% in October. The prices of gas for industry and the population must eventually equalize. Ukrainian authorities are discussing this scenario during negotiations with the IMF mission, reports Ukrainski Novyny News Agency, referring to its sources.

It is noted that the parties agreed upon a new Stand-by lending program for Ukraine, which will replace the current EFF (Extended Fund Facility) program and will help avoid default and a sharp increase in gas prices for the population.

The replacement of the program will provide an opportunity to reset the issue of raising gas prices. The next tranche that can be in the range of -1.9 billion euro may not become the fifth under the current program but the first under the new one.

According to unofficial information, the issue of introducing the land market will also be raised in the new memorandum.

Earlier, the National Bank of Ukraine announced that gas tariffs may grow by 25% by the end of the year.

The government extended the obligations on special gas supplies to the population and heat and energy enterprises for a month at regulated prices. The rise in gas prices will sharply increase the burden on the budget for the compensation of prices. The cost of subsidies will grow by another 20 billion USD, i.e. a considerable part of the tranche is actually immediately demolished. Meanwhile, 60.2% of gas consumers are receiving the gas subsidies. According to calculations their share may increase to 72%, after the price jump.

  Ukraine, IMF