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Fuel market: Imports are approaching pre-war levels

Fuel market in Ukraine

Fuel market in Ukraine

As of June 13, 163,000 cars were brought to Ukraine under preferential customs clearance. Of these, only 0.4% or 735 vehicles are electric cars. It turns out that the crisis in the fuel market has not encouraged the purchase of electric cars. The vast majority of car owners are confident that the situation with fuel will return to normal.

Queues at filling stations will disappear after fuel supplies enough for at least two weeks are provided — now there is a supply sufficient for 7-8 days, and before the war it was sufficient for 15-16 days. Minister of Economy Yulia Svyrydenko informed about this on June 13 during the broadcast of the All-Ukrainian telethon.

What happens to fuel imports

According to Svyrydenko, the volume of fuel imports in March amounted to 60,000 tons, in April — 121,000 tons, in May — 380,000 tons.

Oleksandr Sirenko, analyst of the consulting company Naftorynok, notes in a commentary for The Page that in early June, the total volume of imports reached 18,000 tons per day. "The market reaches the volume of imports that was in the pre-war period, and for certain types — for example, gasoline — the volume already exceeds deliveries in January-February. Given the drop in consumption, these are very good figures," the expert believes.

The current increase in supplies is the result of delivering fuel that was purchased in the first half of May.

According to the plans of importers, deliveries in June may exceed consumption. "This certainly puts pressure on the price in the wholesale sector and at filling stations. If the Cabinet of Ministers wants to regain control over the situation on the fuel market, then it is necessary to limit the markup at filling stations that has now dropped by $200 due to the growth of quotations, to $500 per ton, but continues to be at the highest level in Europe," Sirenko believes.

Sergei Kuyun, Director at Consulting Group A-95, believes that imports of autogas have already exceeded expectations, for diesel fuel (DF) it is reaching the forecast figures, for gasoline it still falls short of 20-25%. Every day more than 230 vehicles with fuel enter the country.

In June, the number of DF suppliers increased one and a half times and reached almost 100; there are only 45 importers of autogas (but this is a third more than in May), and those of gasoline — 27 (21).

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"Of course, the problems are not over, we remain far from that point. Supplies are increasing, but consumption is increasing as well. People are returning, business is picking up momentum. And in August — September, we will have a seasonal peak in consumption," notes Kuyun.

Logistics and other problems in fuel market

In Ukraine, only 10% of tankers can deliver fuel from the EU countries, the rest do not meet European technical requirements (mostly tanker lorries do not meet them). Oleh Khomich, Commercial Director at the OLAS filling station chain in Rivne Oblast, mentions this. Orders for manufacturing tanker lorries are not accepted until October because the production capacities are overburdened.

"Ukrainians have scooped up all the free fuel trucks in Europe, orders for production have been made," Kuyun confirms.

"Due to changes in logistics routes and an increase in demand for the transportation of fuel by tankers, the cost of transportation services has increased several dozen times. For example, earlier the cost of a haul of a tanker for 20 tons of fuel was 1,500 euros, and now it is up to 7,000 euros," notes Khomich.

Kuyun also points to financial problems. "In addition to the fact that European banks do not finance direct agreements for supplying fuel to Ukraine, they actually do not want to consider contracts in all potential regions that may be involved in such supplies."

"Feeling the demand, suppliers, ship owners, and carriers have a sense of grandeur about themselves. A lot of scammers appeared on the market," Kuyun adds.

He notes that major suppliers are very cautious about Ukraine. Rumor has it that such recommendations are provided to them directly by officials, like, take your time. For example, in Bulgaria, traders coordinate the volume of deliveries to Ukraine with the government. "The Moldovans are frustrated because the Ukrainians have sent wholesale prices up, so a lot of filling stations have stopped in the country. In Poland, there are protests by drivers. Hungary… everything is clear here," explains Kuyun.

What is going on at filling stations

Sergey Kuyun shared his observations on the work of the capital's filling stations on the morning of June 15:

  • There are no queues for autogas at all. The only exception are stations where gas is sold for 37 UAH (mainly, its price is 42–45 UAH);
  • there were no queues at all at several filling stations with diesel fuel or there were 5-10 cars, which is generally difficult to consider as a queue when compared to the May events;
  • queues for gasoline — 20-30 cars.

He added that the other day the KLO chain made a massive intervention — almost all operating stations had gasoline. From time to time AMIC and UPG do the same. Marshal sold A-95 for 62 UAH at the weekend, there were no queues, but two days later the price board was switched off again. The same thing happened with "alcohol" gasoline at the BRSM. Privat (ANP) has few stations in the capital, but it is one of the most stable sellers of gasoline.

The market revitalization led to a decrease in pressure on WOG and OKKO that put up the product for free sale once a day.

The chains sell the main volumes through their applications, as evidenced by queues at filling stations, even if there are zeros on the price boards.

For information. According to Naftorynok, in 2021 Ukraine imported 6.85 million tons of diesel fuel, 1.28 million tons of gasoline, and 1.6 million tons of autogas, and consumed: 8 million tons of diesel fuel, 5 million tons of gasoline, and 2 million tons of autogas.

Until February 24, Ukraine imported about 80% of the consumed oil products.

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