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Liquefied gas sets records: what to expect next


Since the beginning of July, the average retail price of liquefied gas has grown by 84 kopecks to 16.17 UAH per liter. At the same time, the cost of a liter of autogas in premium gas station chains increased by 1.3-1.5 UAH. The last time such prices were set at the end of 2018. This follows from the daily monitoring of the oil products market from the analytical outlet Nefteranok.

The Page interviewed analysts and market players about why gas prices are so rapidly rising and what to expect in the near future.

Experts cite the current shortage of liquefied gas on the market as one of the main reasons. According to the analyst of the consulting company UPECO Oleksandr Sirenko, the main suppliers of lpg to Ukraine are Belarus, Russia, and Kazakhstan.

«This month, Rosneft’s resource was received with a delay—at the end of the second decade, the parties that were supposed to arrive in the first decade had just begun to unload. Therefore, there are few offers on the wholesale market now. Yesterday auctions of Ukrainian lpg producers were held already with a deficit and feverish price. We are very sensitive to any changes, since we have only 15-20% of Ukrainian autogas. Everything else is import. There is nothing we can do about it because the production of natural gas in the country is decreasing.»

Oleksander Sirenko

Oleksander Sirenko

analyst at the consulting company UPECO

At the same time, the deficit is not the only reason. According to the Chief Commercial Officer of Ukrgasvydobuvannya, Sergiy Fedorenko, the reason for the price jump was the coincidence of several factors.

In addition to untimely shipments under Rosneft contracts, the rise in prices also had an impact on all adjacent markets, i.e. in Russia: record prices—in the north of Europe and in the Mediterranean. In addition, the impact was made by disruptions in supplies to Poland, and that raised the quotations of Brest. The pricing in the Ukrainian market partially depends on these quotations.

"Thus, on the one hand, we have a limited resource, and on the other, increased consumption during the holiday season. Market operators have reserves at their bases, but there are no supplies at the moment. The earliest tank cars will come in about two weeks, and gas should be sold right now. Therefore, the logistical gap and the rise in prices in adjacent markets logically led to an increase in prices in our market."

Sergiy Fedorenko

Sergiy Fedorenko

Chief Commercial Officer, Ukrgasvydobuvannya

Artem Kuyun, an analyst at the Consulting Group A-95, adds that the cost of liquefied gas is high in principle.

"Last year, during the pandemic, the demand for gasoline decreased, and for gas it increased, as the production volumes of packaging, various containers, etc. increased. And in 2020 there were moments when a ton of gasoline was cheaper than a ton of liquefied gas. Therefore, liquefied gas has risen in price globally in the world. On the wholesale Ukrainian market in July, the price for lpg increased by 1.65 UAH per liter, 40 kopecks of this is a feverish component."

Artem Kuyun

Artem Kuyun

analyst of the Consulting Group A-95

Recall that in May, the Cabinet of Ministers imposed state regulation of prices for gasoline and diesel fuel. According to it, the maximum levels of the trade margin were 7 UAH/liter for diesel fuel and 5 UAH/liter for gasoline grades A-92 and A-95.

At the same time, the regulation did not relate to liquefied gas, and the price ceiling was not set. Although sales of this particular fuel are leading in the retail market.

According to the experts interviewed, the price of liquefied gas will remain within current limits by the end of the month.

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