IMF estimates Ukrainian gas import needs at 5 bcm, need for financial assistance at $3.6 bln

MOSCOW. Dec 26 (Interfax) - The central scenario presented by the International Monetary Fund (IMF) under the Program Monitoring with Board Involvement (PMB) says that Ukraine needs to buy 5 bcm of gas in equal amounts over the next 12 months.

The IMF table reported by the Ukrainian media says that Ukraine would have 6 bcm of gas left after this heating season without imports and would be able to increase gas reserves only to 8.5 bcm by the next heating season. As a result, the reserves will shrink to 6 bcm by the beginning of 2024.

The imports will allow Ukraine to accumulate slightly less than 9 bcm of gas by the end of this heating season and to increase the reserves to almost 14 bcm by the next heating season, which is just 0.5 bcm less than it had at the beginning of this season.

"To help address Naftogaz's associated increase in financing needs, the government is already providing budget support to the company through an implicit subsidy in the form of foregone gas royalty revenues, estimated around UAH 145 billion ($3.5 billion) for 2023," the IMF said in the materials on its website to the PMB.

At the same time, IMF experts say that larger assistance might be required, including for public utility compensations, considering that the fixed retail price of UAH 8.4 per cubic meter is much smaller than the price of imports.

District Heating Companies (DHCs) and the Gas Transmission System Operator (GTSO), whose liquidity has been affected by a drop in transit fees and low-capacity use, may also require support.

"Overall, staff estimate that up to UAH 150 billion ($3.6 billion) in additional financial support to Naftogaz, the GTSO, and DHCs could be required in 2023," IMF experts said.