December 25, 2007 / 2:57 PM / 12 years ago

UPDATE 1-Ukraine ups gas price ceiling for industry 30 pct

(Adds details, minister on prices for residential consumers)

KIEV, Dec 25 (Reuters) - Ukraine’s government has raised the gas price ceiling for industrial consumers by 30 percent for next year following a price increase for imported gas likely to intensify pressure on local producers and fuel inflation.

The government said in a statement on its Web site www.rada.gov.ua on Tuesday it had allowed a rise in the ceiling to $185 per 1,000 cubic metres (tcm) from $143 in 2007.

The news follows an agreement signed with Russian gas export monopoly Gazprom (GAZP.MM), under which Ukraine is to pay $179.50 per tcm from next year against $130 at the moment.

Economists say the increase will hit the competitiveness of Ukrainian producers, especially the chemicals and steel sectors, and fuel inflation.

Ukraine consumes around 75 billion cubic metres (bcm) of gas per year and imports 55 bcm. It also produces around 20 bcm per year which is used by individuals for heating needs.

Economy Minister Bohdan Danylyshyn told reporters gas prices for residential customers would remain unchanged next year.

He also said new Prime Minister Yulia Tymoshenko’s government hoped to avoid recession in the economy and curb inflation next year.

Former prime minister Viktor Yanukovich’s government had forecast gross domestic product growth of 7.0 percent in 2007 and 6.8 percent in 2008. But consumer price growth is now forecast at 14.5 percent, far in excess of initial projections, and 9.6 percent next year

Danylyshyn said the Economy Ministry would most likely revise the forecasts once the government produces an amended 2008 budget — as promised by Tymoshenko before the New Year.

He said the government aimed to mantain economic growth at least at 2007 levels. (Reporting by Pavel Polityuk and Natalya Zinets; writing by Maria Kiselyova)

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