The financial problems of Naftogaz Ukraine, the state’s natural gas monopoly, are growing by the day. Prime Minister Yulia Tymosheno went to Luxembourg this week, seeking a $4 billion loan from European banks to pay for Russian natural gas imports. This comes after the Kremlin snubbed a $5 billion loan request.
While it may be strangely reassuring that Tymoshenko is willing to travel anywhere and ask anyone, hat-in-hand, for money, her false bravado is out of place. Only days before the European loan request was reported on June 16, she vowed that Naftogaz would never miss a payment and never default on her watch. Is that pledge good, regardless of whether the $4 billion in fresh foreign credits come through, Ms. Tymoshenko?
Naftogaz has already borrowed heavily from Ukrainian banks, no doubt bowing to government pressure, creating a mountain of debts. President Victor Yushchenko sounded the alarm on Naftogaz, estimating the company’s credits have now reached a staggering $9.7 billion.
Both Yushchenko and Tymoshenko are tainted by their associations with shady intermediaries in the gas debate. Leaving the past aside, both could do a great service for the nation by uniting and improving Naftogaz’s finances, which don’t have to be this dire.
Many experts have pointed to the solution: Crack down on deadbeats who don’t pay, including large businesses and municipal gas companies. Start charging the population higher and non-subsidized prices for utilities, so that energy wastefulness is curbed.
As Razumkov think tank energy programs director Volodymyr Saprykin said in a June 16 interview with the Lviv-based Western Information Agency: “There is a way out – to work on deadbeats, something the cabinet has failed to do.”
Ukraine’s energy problems are difficult to solve. But stopping subsidies and starting to collect from deadbeats, coupled with squeezing out murky gas-trading intermediaries and energy-efficiency investments-, are good steps forward.
