KIEV, Jan. 24 – A Ukrainian government team left for Washington on Tuesday seeking to persuade the International Monetary Fund to resume its $15.5 billion lending program without hiking domestic natural gas prices.

The team, led by First Deputy Prime Minister Andriy Kliuyev, also includes recently appointed Finance Minister Valeriy Khoroshkovskiy.

Ukraine, which is facing mounting foreign debt payments this year, is due to pay $3.8 billion to the IMF in 2012, of which $600 million will have to be paid as soon as in February.

“The task is to resume the program, to get the loan, if it’s possible,” Khoroshkovskiy said in an interview with Inter television over the weekend.

President Viktor Yanukovych, who appointed Khoroshkovskiy last week to replace Fedir Yaroshenko, said the government must make sure the deal with the IMF does not call for hiking gas prices.

“The IMF, for example, demanded to hike the gas prices for households and for heat making companies. This means hiking utilities costs by 100% to compensate the deficit of funds,” Yanukovych said in comments released by the presidential press service on Tuesday. “We understand that such pressure on the people is excessive, and we have refused to do it.”

Khoroshkovskiy explained that the further hike in gas prices for households will not solve the problem, but will rather lead to the fact that the households will not be able to maintain the payments.

“This is the way to nowhere,” Khoroshkovskiy said. “We will face the arrears.”

The IMF suspended its loan to Ukraine in early 2011 after the government had refused to hike 50% gas prices for households. Instead, the government has put financial burden on Naftogaz Ukrayiny, the national energy company, which buys expensive Russian gas and re-sells it - at a major discount - to households.

Khoroshkovskiy said the new approach in the talks with the IMF will focus on balancing financial situation at Naftogaz without resorting to sensitive measure of hiking gas prices.

“The main issue that must be discussed is not hiking the prices, but balancing out Naftogaz,” Khoroshkovskiy said.

The government has been trying over the past 18 months to balance out Naftogaz by trying to re-negotiate lower natural gas prices with Gazprom of Russia. Gazprom, however, refused to lower the prices without Ukraine making serious political concessions.

Energy and Coal Industry Minister Yuriy Boyko said in response last week that Ukraine will cut gas imports from Russia to 27 billion cubic meters in 2012 from 40 billion cu m in 2011. (nr/ez)