The FINANCIAL — Ukraine's government has raised domestic household gas prices by a staggering 50% from August 1 as part of its measures to balance the budget and get much-needed funds from the International Monetary Fund (IMF), RIA Novosti informed.
A gradual increase in natural gas prices for the Ukrainian population to what the government says is an economically justified level is a major condition of Ukraine's cooperation with the IMF, which has pledged to allocate a $15.15 billion loan to the ex-Soviet republic.
The opposition led by ex-premier Yulia Tymoshenko who lost the presidential election earlier this year to Viktor Yanukovych has appealed against the government's decision in a court of law.
Tymoshenko also said such a large loan would be a burden for the country, "inadmissible at the moment," and that Ukraine actually needs "from three to five billion, maximum."
In November 2008, the IMF started a $16.4 billion standby loan arrangement for Ukraine, of which more than $11 billion was disbursed. Ukraine expected to receive the remaining $3.8 billion in November 2009, but the funds were frozen due to political instability in the country.
Since the new government came to power in Ukraine earlier this year following presidential elections won by Yanukovych, the situation in the country has normalized. Yanukovych has managed to convince the IMF that reforms being carried out by the new Ukrainian authorities will allow rapid economic growth in the country.