KIEV — Ukrainian Prime Minister Yulia Tymoshenko on Monday put off the unpopular step of raising gas prices at home until after the Jan. 17 presidential election despite a promise to the International Monetary Fund.
“I am going to recommend … that the price of gas for communal heating utilities stays at the present level for the moment for the autumn-winter period because I understand the whole crisis situation,” she told a meeting of regional officials.
“I understand the political situation as we prepare for the presidential election,” she said.
Tymoshenko’s government had promised to raise household gas prices on Sept. 1 and utility prices on Oct. 1, both by 20 percent. That had been a condition of the IMF’s $16.4 billion bailout package and an EU-brokered $1.7 billion gas infrastructure loan.
But it skipped both dates.
The World Bank’s vice president for Europe and Central Asia said Saturday that the bank expected Ukraine to honor its promise.
“One of the key measures we all agreed with the government is to increase the tariffs. It’s a difficult measure, but there was an agreement. Yes, we expect they will raise the prices,” Philippe Le Houerou told a news briefing.
Tymoshenko, her rival President Viktor Yushchenko and opposition leader Viktor Yanukovych are set to run in the vote. Tymoshenko clearly feared that raising gas prices would have a bad impact on her ratings. These stand at about 14 percent, lagging Yanukovich’s 24 percent. Yushchenko, who looks set for a crushing defeat with support of just 4 percent, urged Tymoshenko to honor the government’s pledges, raise prices and help balance the books of Naftogaz. Failure to raise gas prices could lead to the IMF refusing to pay out a fourth credit tranche of about $3.8 billion, said an official in Yushchenko’s office.
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