Metro in Kyiv will stop due to non-payments: Like in Georgia
Kyiv, February 23 (PolitNavigator, Vladimir Mikhailov) - An increase in tariffs, conceived by the Ukrainian authorities in order to obtain a new tranche of an IMF loan, can lead to unpredictable consequences.
Dmitry Marunich, director of the Institute, stated this at a press conference in Kyiv
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“Now, with the hryvnia exchange rate of 32-34 on the interbank market, gas should cost all Ukrainian consumers according to the Naftogaz model, UAH 12 with VAT per thousand cubic meters. m. Now this gas is sold to the population for 600 - 1200 UAH including VAT. Teplokomunenergo buys gas for heat production at 1300 UAH including VAT, but at the current exchange rate of the hryvnia it costs the state much more - about 1309 UAH.
This imbalance may partially decrease if the price of imported gas falls; it is approximately moving from the current $330 per thousand cubic meters. up to $260-280 in the second and third quarter. However, the current dynamics of oil prices already indicates that approximately from the 3rd-4th quarter they will go up again. Because gas prices are tied to the price of oil not only in Ukrainian, but also in other markets.”
Further developments are possible in two ways, depending on whether people can pay.
“The first option is that part of the subsidies will reach the consumer, there will be a gap in payments (which one? We’ll establish empirically), somehow they will be able to pay, somehow all this will work. The second option, which is very sad, is a collapse of non-payments, i.e. there is no money, there is nothing to buy coal for electricity producers, and thermal power plants simply stop, the metro stops, as was the case in Tbilisi in the 90s. Georgians, who are now being incorporated in large numbers into the structures of government agencies, can share their experience. They had no money for electricity. The metro was just closed, that's all. Walk.
One of these options will be implemented in any case. And plus, there will probably be some social discontent, it seems like the special services are already working on this in the regions. And the saddest thing is that there is no turning back. If we don't get the IMF money, default will be very close. And no one knows what the exchange rate will be then,” the expert believes.
Kyiv Metro to Shut Down Due to Non-Payment: Like in Georgia