Gas price hike to raise tension in Ukraine

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July 29, 2010, 3:54 p.m. |
KIEV, Ukraine (AP) — Ukraine's trade unions warned Thursday that an abrupt price hike for natural gas will stoke social unrest and uncontrolled inflation. Increasing gas prices was a key demand of the International Monetary Fund in exchange for this week's approval of a US$15 billion loan over 2 1/2 years to help Ukraine with economic reforms.

Anatoliy Akimochkin of Ukraine's Trade Unions Confederation pledged to sue the government over the 50 percent price hike to be imposed on households from August.

"We will challenge the price hike in court because the government did not discussed it with us, as laws require," he said.

Akimochkin said the trade unions will hold nationwide protests when the ongoing heat wave is over.

Ukraine's economy that was already weakened by the global economic meltdown and political instability has been further crippled after Russia has repeatedly raised gas prices following political disagreements.

The two nations' disputes halted European gas deliveries in early 2009, prompting the European Union to seek alternative supply routes that did not go through Ukraine. Russia also has pursued other export pipelines bypassing Ukraine.

Even Ukraine's leaders expressed dissatisfaction with the hike.

"I myself don't like this decision, but we had no choice," Prime Minister Mykola Azarov said.
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