Page 40 - UKRRptNov18

households who are subsidized from the budget in 2018 is 6,900, the Cabinet's Secretariat said, quoting Ukrainian Prime Minister Volodymyr Groysman as saying on TV. Next year, their number is expected to remain unchanged, according to forecasts, he said.
Ukraine's national and local budgets will fail to receive around UAH10bn ($355mn) over the illegal sale of fuel in the country, head of the fiscal committee of the Ukrainian Oil & Gas Association Nelia Pryvalova said at a conference on October 3. "At least 1,500 gas stations work with violations. The volume of fuel sold through illegal stations that work without permits, amounts to about 40,000 tonnes a month," Interfax news agency quoted Pryvalova as saying. She added that the shadow market in the segment of diesel fuel reaches 20%, liquefied petroleum gas - from 30% to 50%, depending on the region. However, Pryvalova recalled that illegal filling stations work without documents on a land parcel, without formal employment of workers and in violation of safety rules. At the same time, the threshold for entering this "business" is extremely low. "If building a legal filling station costs about $2.5mn, then to supply an illegal "barrel" costs $20,000-30,000," she said.
Ukraine's national and local budgets will fail to receive around UAH10bn ($355mn) over the illegal sale of fuel in the country, head of the fiscal committee of the Ukrainian Oil & Gas Association Nelia Pryvalova said at a conference on October 3. "At least 1,500 gas stations work with violations. The volume of fuel sold through illegal stations that work without permits, amounts to about 40,000 tonnes a month," Interfax news agency quoted Pryvalova as saying. She added that the shadow market in the segment of diesel fuel reaches 20%, liquefied petroleum gas - from 30% to 50%, depending on the region. However, Pryvalova recalled that illegal filling stations work without documents on a land parcel, without formal employment of workers and in violation of safety rules. At the same time, the threshold for entering this "business" is extremely low. "If building a legal filling station costs about $2.5mn, then to supply an illegal "barrel" costs $20,000-30,000," she said.
6.1.2 Budget dynamics - funding & privatization
Ukraine placed a $750mn five-year tranche of sovereign Eurobonds, and a ten-year tranche of $1.25bn at a snap offering on October 25 that follows immediately on the back of a new IMF deal. The yield of the five-year tranche maturing in February 2024 was 9% per annum, the ten-year tranche some 9.75%. The initial reference point was about 9.25% and about 10% respectively. The volume of the order book amounted to $4.9bn, Interfax news agency reported quoting unnamed market sources. The move immediately followed an agreement between Kyiv and its main donor, the International Monetary Fund (IMF) over a new 14-month stand-by programme of $3.9bn . The programme will replace the arrangement under the Extended Fund Facility (EFF) agreed March 2015. Ukraine has received $8.4bn from the IMF so far under the multinational lender's EFF. So swift move has triggered worries that the Ukrainian government is preparing to cancel Kyiv's decision to increase gas tariffs for the population by 23.5% from November 1, which is necessary for the new $3.9bn support programme. "Surprise, surprise. Let's hope if they get the cash from the Eurobond, they still remember the list of things to do with the SBA, to actually get IFI cash by year end," Timothy Ash, a senior sovereign strategist at BlueBay Asset Management, wrote in a note on October 22.
40 UKRAINE Country Report November 2018 www.intellinews.com