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Cabinet of Minister Can Increase Gas Rates to Population up to 100%

Wednesday, 27 April 2016 17:47

On Wednesday, the government can fulfill one of the main requirements of the IMF – to increase gas rates for population to 100% of the import parity, Economic Truth reports.

As it is noted, the increase was planned from April 1 of this year up to 75% of the parity, however the government of Arsenii Yatseniuk postponed it for one month.

“In the midst of the political crisis he left this unpopular decision for successors. Such a little revenge”, the interlocutor explained to ET at the Ministry of Finance.

In fact, increasing the rates to 100% the Cabinet of Ministers will do more than IMF requires.

“In order to undergo all negative at once and not extend it for two years. But people have not adapted to current prices yet. Plus this year we had warm winter. I am afraid that we will enter the non-payment crisis”, - one of members of government explained in the conversation with ET.

According to him, the dispute regarding increasing the “parity” – to 75% or 100% - was discussed to the last. This is firstly.

Secondly, the price of imported gas decreased more and quicker than it was expected. That’s why now it is possible to increase the internal price and come out to the zero financial balance of NJSC.

One more moment with rates of the direction refers to subsidies for population for payment of utility services. On one hand, the increase of rates means the increase of expenses of the state budget for payment of subsidies.

On the other hand, the price increase leads to the increase of energy efficiency level.

There are expectations that this year the population will massively react to the increase of rates in 2014-2016 and will start saving. To figure out this effect is difficult, but the result of decrease of consumption can mitigate the necessity of increasing subsidies.

The import parity is the price of import fuel plus VAT and plus price for gas transportation. Currently the imported fuel costs 210 dollars, and the delivery – about 900 hryvnias.

As it was reported previously, the International Monetary Fund is concerned about the absence of the decision of the Cabinet of Ministers on the increase of rates for natural gas for population since April 1.

In addition, previously Groisman reported that the increase of gas is urgent.

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