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11:39
INCREASE IN ENERGY PRICES, RATHER THAN IMPROVING OF NAFTOGAZ'S ECONOMIC STATE, THREATENS SOCIAL DESTABILIZATION, SAYS FIRST VICE PREMIER

Kyiv, August 4 (Interfax-Ukraine) – The increase of energy prices, rather improving the economic state of National JSC Naftogaz Ukrainy, will lead to a wave of non-payments and social destabilization, according to First Vice Premier Oleksandr Turchynov.

He gave his views in an interview with the Kommersant newspaper published on Monday.

Asked why the government did not dare risk increasing energy prices for such a long time, which is needed for the economy, Turchynov said that there is a problem that should be approached realistically, - the solvency of the public.

"If we simply increase the price of gas and electricity for households, we could rouse a wave of non-payments instead of the improvement of Naftogaz's economic state and generation. So, we would not improve the situation in the energy sector while at the same time destabilizing society."

He said that Ukraine would successfully pay the prices on the international markets, but that the incomes of citizens are not rising in line with them.

"We're looking for the best balanced solutions. It's important for us not only to create conditions for the efficient operation of companies, but also to provide for a real rise in the incomes of those who produce material comforts," he said.

Turchynov noted that if Ukraine does not cut gas and electricity consumption in the industrial and public utility services sectors, it would not be able to compete on the international markets, and the country would face permanent crisis. He also said that it is necessary to quickly react to problems the government had inherited – corruption in the energy sector, the absence of payment discipline and problems in returning debts.

The first vice premier said that the key task for settling problems of Naftogaz Ukrainy is the cut of natural gas import via a cut in energy consumption.

"It's necessary to stimulate the public, heat power supply companies, apply energy saving technologies and use alternative energy sources. So we'll be able to settle the major problems of Naftogaz. I don't see any other path. Next year, the price of natural gas for us will be a market price. A compromise on the issue could really threaten our independence," he said.

He said that it is not right to say that the International Monetary Fund (IMF) was forcing Ukraine to act.

"We're acting not at on the orders of the fund, but according to an anti-crisis program drawn up by us. The IMF, World Bank and leading foreign and domestic economists supported it," he said.

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