Urkaine's cash-strapped government on Wednesday nearly doubled average household gas tariffs in order to secure the release of billions of dollars in frozen IMF and other Western aid. The long-delayed step is likely to play poorly with people who have already suffered from cutbacks imposed under an austerity plan set by the International Monetary Fund when it approved Kiev's $17.5-billion (15.5-billion-euro) rescue loan in 2014.
Former prime minister and current populist Batkivshchyna (Fatherland) party leader Yulia Tymoshenko called the rate hike "a crime". But it was immediately hailed by US Ambassador Geoffrey Pyatt as a "big step forward for Ukraine's energy independence." Visiting US Assistant Secretary of State Victoria Nuland on Wednesday also stressed that Washington's assistance was "tied to Ukraine staying on the reform course" that included strict and timely compliance with the IMF's programme.
Ukraine had resisted ending its Soviet-era practise of subsidising energy prices for years because of the likely backlash the government would face from voters living in one of Europe's poorest states. Western lenders suspended their aid to Ukraine last year while waiting for the resolution of a prolonged political crisis that saw several top officials tender their resignations over the government's seeming inability to fight graft.
The political tussles concluded with a major cabinet overhaul in which Volodymyr Groysman - a 38-year-old protege of President Petro Poroshenko - replaced Arseniy Yatsenyuk as prime minister on April 14. Groysman immediately pledged his commitment to belt-tightening measures that should help Ukraine achieve sustained economic growth for the first time since a pro-Western government came to power in wake of the February 2014 ouster of a Russian-backed regime.
The new premier called Wednesday's decision to raise gas prices "difficult but essential for our country". "I would like to separately stress that we are now putting a final end to corruption on the gas market," Groysman told a cabinet meeting in televised remarks. The new unified gas tariff of 6,879 hryvnias ($273.41) per 1,000 cubic metres is nearly double the 3,600 hryvnias that most households payed between October 2015 and the end of March. Those who consumed a particularly large amount of gas had to pay 7,188 hryvnias and will now see their rates cut. The measure will go into effect on Sunday across government-held regions of the former Soviet state.