Ukraine Bailout
Ukraine's Prime Minister Arseny Yatseniuk praised the new law Reuters

Ukraine's parliament has overwhelmingly backed a law designed to clamp down on the country's oligarchs, who have dominated the gas distribution sector for years.

The new law is intended to make access to the gas market non-discriminatory and enshrine the principles of free competition and some consumer protection. The legislation is also an important step as Kiev seeks to reduce the country's economic dependence on Russia and increase integration with the European bloc.

Under the new legislation, the Ukrainian state-run gas conglomerate Naftogaz will be split up into separate businesses, including production, transit, storage and supply companies.

"For 10 years we couldn't get the vote through, but finally today we de-oligarchised and de-monopolised our country's gas market," said Ukrainian Prime Minister Arseniy Yatseniuk.

Breaking up Naftogaz will bring to an end a series of costly energy subsidy agreements and rent-seeking agreements. The deals have been an expensive burden on the Ukrainian budget.

Reform of costly subsidies is a key condition to Ukraine receiving financial assistance from the International Monetary Fund. Ukraine received $17bn from the Washington-based fund last year. The government in Kiev has sought to finalise a debt restructuring programme by this summer, in order to unlock further funds from the body.