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Alcohol in gasoline. Will there be a rise in fuel prices?


From 2022, bioethanol will be blended to every liter of gasoline. This initiative was supported by parliamentarians by adopting bill No. 3356-Д in the first reading. What is this initiative fraught with?

The document provides for the imposition of a mandatory 5% norm for the content of biocomponents in motor gasolines from May 1, 2022. The initiative does not apply to gasolines with an octane rating of 98 and higher, as well as to fuel supplied for the needs of the Ministry of Defense, the State Reserve and for forming minimum reserves of oil and oil products.

According to the bill authors, the adoption of the law will contribute to the creation of additional jobs, an increase in the workload of distilling plants and related areas, as well as an improvement in the environmental situation by reducing the emissions into the atmosphere of harmful substances generated during fuel combustion.

Contempt of the law will result in the following sanctions. For deviating from the norms for the biofuel content in gasoline, for each ton of the sold consignment of gasolines, a fine of 7 minimum wages is provided. And failure to timely provide information on the content of biofuels can be punishable with a fine of 100 minimum wages, over seven days—150 minimum wages.

According to the document, accounting and control of the biocomponents content in gasoline is assigned to the State Agency for Energy Efficiency and Energy Saving of Ukraine.

Market participants reacted negatively to the proposed initiative. For instance, the largest Ukrainian producer of oil products, Ukrtatnafta, stated that the adoption of the bill would have a negative impact on the oil refining industry.

According to the company's specialists, the replacement of traditional gasolines with biofuels in the context of a reduction in the total capacity of the gasoline market will lead to the technical impossibility of implementing the law requirements in the work environment of a traditional oil refinery.

The Ukrainian Oil & Gas Association also criticized the bill. According to its statement, blending bioethanol to petroleum products will lead to an increase in prices, since alcohol is now more expensive than gasoline.

According to Chief Commercial Officer of Ukrgasvydobuvannya, Sergiy Fedorenko, the proposed initiative is rather controversial.

«Adding bioethanol has been used for a long time in the EU and in the world with different efficiency. For example, in Brazil, where there is a constant warm climate and no temperature extremes, this is a fairly successful project. In the EU, where its goal was to replace petroleum products and support agriculture, after 15 years, we are witnessing a rise in the product price. It is best for us to study this bill with respect to lobbying the interests of the new owners of distilling plantы, who became them after the recent privatization.»

Sergiy Fedorenko

Sergiy Fedorenko

Chief Commercial Officer, Ukrgasvydobuvannya

Quality control is an important issue, Sergei Kuyun, director of Consulting Group A95, says.

«Today no one controls the quality of fuel in Ukraine. There is a state body (State Environmental Inspectorate), but it does nothing, since it does not have money, equipment and employees. Who will control the quality of this alcohol-containing gasoline? We have 50% of imported fuel. How will they produce it?»

Sergei Kuyun

Sergei Kuyun

Director at Consulting group A-95

In addition to this, consumer complaints about the inefficiency of fuel consumption and its stratification in the fuel tank are possible.

"If a person leaves a car with alcohol-containing gasoline in the tank, in a month without expensive stabilizing additives there will be a layer of alcohol, water, and fuel in this tank."

Sergiy Fedorenko

Sergiy Fedorenko

Chief Commercial Officer, Ukrgasvydobuvannya

According to the expert, at some point a layer of water will get into the fuel system and the driver will be forced to pay for expensive engine repairs.

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