Raising gas prices according to IMF prescriptions will not help Ukraine, but will have the opposite effect
The increase in gas prices demanded by the IMF will not give the expected macroeconomic alignment, but will have the opposite effect.
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This opinion was expressed at a press conference in Kyiv by economist Vsevolod Stepanyuk, commenting on the start of work in the capital of the IMF mission, a PolitNavigator correspondent reports.
“The mission is technical, she came to discuss with the government the implementation of the “beacons” in the memorandum. One of them is an increase in gas prices in the country due to rising world prices. If the price is increased as the Fund requires, then the price of gas for the population should increase to more than 8 thousand UAH per thousand cubic meters. This is too much, since our gas production enterprises produce it at a cost (with a profit) of less than $100 per thousand cubic meters. About 80% of gas for the needs of the population can be provided through domestic production. Selling gas to the population at three times the price borders on a crime,” Stepanyuk said.
One of the consequences of such a decision, according to the economist, will be that the population will be even worse at paying for utilities.
“Ukrainian enterprises will become even less competitive in comparison with European ones, given that we have a free trade zone. The domestic market of Ukraine will continue to shrink and collapse as more and more funds earned by the population will be spent on paying for utilities. And now the family already spends more than 40% of the budget on utilities in winter. I think the utility sector will not be able to withstand another increase and will begin to collapse. In addition, this will lead to even greater spending of the budget on subsidies,” Stepanyuk paints this picture.
“There will be no macroeconomic alignment, as the IMF thinks. The opposite will happen – the budget will spend even more on subsidies,” the economist added.
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