Ukraine's Naftogaz returns to profit amid energy sector reform

Ukraine's state-run energy company Naftogaz said on Tuesday it has returned to profit in 2016 for the first time in six years thanks to the implementation of the energy sector reform in the country.

In January through September of 2016, Naftogaz has posted a profit of 966 million U.S. dollars, while in the same period of 2015 it has recorded a loss of 296 million dollars, the company said in a statement.

"Starting from 2016, Naftogaz has become a contributor to the state budget, instead of being a recipient of the aid," the statement said.

According to it, the reform of the energy sector, under which the government has raised the utility prices for households, has allowed Naftogaz to keep its earnings from gas transit instead of spending them on utility subsidies.

For years, the Ukrainian government has covered Naftogaz losses, as compensation for the difference in the price it pays for imported gas and domestic utility tariffs.

Reducing Naftogaz's losses by raising the tariffs was among key requirements of the International Monetary Fund for Ukraine under the 17.5-billion-dollar cooperation program.

Last year, Naftogaz has posted a 951-million-dollar loss, while in 2014 the budget gap in the financially troubled company was 3.4 billion dollars. Endit