March 4, 2019 / 5:30 PM / 3 months ago

UPDATE 1-Ukraine court verdict on gas won't affect IMF deal -government

(Adds government’s comments, details)

KIEV, March 4 (Reuters) - A Ukrainian court’s decision to declare a 2016 gas price increase illegal will not affect the government’s current cooperation with the International Monetary Fund, a government spokesman said on Monday.

Ukraine raised gas prices for households by almost 25 percent last November to secure a new $3.9 billion IMF stand-by agreement, a deal aimed at keeping the country’s economy stable as it holds presidential and parliamentary elections this year.

Opposition leader Yulia Tymoshenko, who is challenging incumbent President Petro Poroshenko in the March 31 presidential election, had filed a suit at the Kiev administrative court against an earlier gas price hike in 2016.

Asked if the court ruling would force the government to reverse the more recent gas price hike, thereby threatening the terms of the IMF deal, Vasyl Riabchuk said: “No, it did not.”

He said the verdict related to an earlier decision, from 2016, which no longer had legal force.

“Despite this, the cabinet of ministers will appeal and challenge this court decision,” he said in a text message to Reuters.

Tymoshenko has made her opposition to the government’s decision to raise gas prices a central part of her campaign in the March election. Tymoshenko’s party said in a statement the verdict showed the gas price increase, which was introduced in May 2016, was unjustified.

Reporting by Natalia Zinets; writing by Matthias Williams; editing by Louise Heavens and David Evans

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