Reuters: Ukraine is on the verge of a diesel fuel deficit and a price increase because of Russia and Belarus

Author

Diana Polunina

In May, Ukraine faces a deficit of diesel fuel. This is due to the interruption in supplies of the Russian company Rosneft and scheduled maintenance at the Mozyr oil refinery in Belarus.

Reuters reports that, according to source traders, the deficit may range from 150,000 to 270,000 tons of diesel fuel. In particular, the Mozyr Oil Refinery will supply 150,000 tons of diesel fuel to Ukraine instead of the usual 240,000 tons, since maintenance starts on May 15 and will last until June 15, 2021.

At the same time, according to Deputy Prime Minister of Russia Alexander Novak, in order to stabilize the situation on the domestic market, the introduction of temporary restrictions on the export of certain oil products is being discussed. The Ministry of Energy of Russia has supported this idea in its Telegram channel, specifying that it is about the export of gasoline.

Diesel fuel deficit in Ukraine: what the country will do

The Head of the Antimonopoly Committee (AMCU) Olha Pishchanska warned the operators of the gasoline and diesel fuel market from anti-competitive actions. She wrote about this in the column of the online newspaper Economichna Pravda.

"We warn operators against potential anti-competitive actions that could negatively affect prices and market filling. Attempts to create an artificial deficit, unreasonably increase the cost, impose barriers to access to alternative infrastructure, in particular ports, are unacceptable. These are the red lines of national importance. Going beyond them is unacceptable," she wrote, adding that the AMCU would be "especially exacting", given the situation with the supply of oil products from Belarus and Russia.

Fuel price in Ukraine

According to the director of A-95 Consulting Group Sergey Kuyun, after the "rally" with prices last week, the situation stabilized in the wholesale market, but now it is the turn of retail, Auto.24 writes.

"Unfortunately, there is no clarity about the import of fuel supplies, and this increases the nervousness, and primarily, it is about diesel fuel. Moreover, railway transportation has become more active, diesel is needed for diesel locomotives. I believe there will be an upward correction of diesel fuel prices in discounter chains" he said.

Reuters notes that Ukraine consumes about 7 million tons of diesel fuel per year. It imports two thirds from Belarus and Russia.

Context. At the end of December 2020, the Cabinet of Ministers extended for a year a 4% special duty on diesel fuel supplied from Russia by pipeline transport, a 3% duty on Russian liquefied gas and a 65% duty on supplies from the country of all types of coal, except anthracite, coking, and bituminous.

Earlier, the largest supplier of Russian petroleum products, Proton Energy, announced the completion of work and stopped supplying liquefied gas and diesel fuel to Ukraine from April 1.