Bloomberg News

Ukraine Plans to Widen Budget Gap by $938 Million on Gas Costs

November 06, 2012

Ukraine’s government proposed widening this year’s budget deficit by 7.68 billion hryvnia ($938 million) to cover losses at utility companies for 2011 and 2012.

The former Soviet republic’s fiscal shortfall will increase to 38.8 billion hryvnia from a planned 31.13 billion hryvnia, according to a draft bill published today on Parliament’s website. Funds needed to compensate utilities for missing household heating payments will more than double to 15.91 billion hryvnia, according to the document.

Ukraine is seeking cheaper natural gas imports from Russia to lower the cost of subsidizing household heating tariffs. The International Monetary Fund has frozen a bailout program because of the government’s refusal to raise domestic fuel tariffs, a move the Washington-based lender has demanded to stem losses at state energy company NAK Naftogaz Ukrainy.

The 450-seat legislature, based in the capital, Kiev, will discuss the bill today.

To contact the reporter on this story: Kateryna Choursina in Kiev at kchoursina@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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