The IMF commented on gas prices in Ukraine

В МВФ прокомментировали цены на газ в Украине

Longman commented on gas prices in Ukraine

The IMF noted the progress of Ukraine to move away from government control of gas prices for households.

The price control is ineffective from the point of view of social protection. This was said by the IMF resident representative in Ukraine Jost Longman in an interview with Finclub, published on Tuesday, February 12.

Also Longman noted that price control leads to excessive consumption and corruption. According to him, the best approach is to provide the right markets to determine the price, and then provide well-focused subsidies for those who need them most.

“Over the past five years, Ukraine has made remarkable progress in that it moves away from government control of gas prices for households and instead provides those households who need it, by subsidies from the budget. In the rich households pay a significant share of the cost of the energy that they consume. And the additional revenues provide a resource that is used to assist poorer households, who are unable to pay the full price of energy. The system of subsidies has been greatly expanded, and it provides a system of social protection for a large part of less wealthy households,” he said.

Longman added that the narrowing of the gap between the price of gas for households and the price of gas for industry has reduced the opportunity for corruption.

Jost informed Langman reported that the international monetary Fund is not yet seen radical changes in the level of corruption in Ukraine.

It was also reported about the requirements of the IMF to Ukraine on gas prices. Thus, the IMF suggests that the Cabinet will increase the retail price of gas for households by 15% until 1 may. The next stage is complete in the price range of the market from 1 January 2020.

 

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