Ukraine’s relationship with the IMF is potentially complicated by Yanukovich’s pledge to keep down gas prices for domestic customers as the IMF has insisted Ukraine should reduce the amount it spends on subsidising prices to cut its budget deficit.
In the past, Ukraine’s quarrels with Moscow over gas prices have led to supply disruptions to the European Union, which depends on Russia for roughly a quarter of its gas.
All parties are seeking to increase their options.
Russia has been busy building pipelines to bypass Ukraine and pushing Kiev to cede control of its pipeline network.
The European Union has been exploring ways to diversify its suppliers by piping Azeri gas to Europe, whileUkraine, which signed a deal with Royal Dutch Shell last month, is seeking to develop its shale reserves.