They Give 10 Liters of Gasoline in Ukraine

MOSCOW, Russia -- The fuel crisis in Ukraine is exacerbating. TNK-BP Ukraine and LUKOIL-Ukraine restricted Monday the gasoline release to 10 liters per car. Ukrainian Prime Minister Yulia Timoshenko promised to do away with the fuel shortage within two weeks by attracting additional gasoline from Belarus and the Baltic States.

Prime Minister Yulia Timoshenko and LUKOIL CEO Vagit Alekperov meet in Kiev

Ukrainian Economy Ministry revised at the end of past week its ruling, which had fixed the maximum prices for petroleum product till June 1, 2005. As a result, the top prices for diesel fuel and gasoline could go up from 1.4 percent to 8.7 percent. The decision was made in the environment of heavy deficit on retail gasoline market of Ukraine built up, first of all, because of repair halt at Khersonsky NPZ refinery (member of Alliance) and because the repair of TNK-BP’s Lisichansky NPZ would complete May 25 vs. the scheduled May 10. Due to the acute shortage, a raft of filling stations are selling Ai-95/92 gasoline only for non-cash settlement. Some stations have completely stopped retail sales of gasoline.

Fuel and Energy Minister of Ukraine Ivan Plachkov announced yesterday LUKOIL-Ukraine and TNK-BP Ukraine resume gasoline retail in their filling stations. The quantity will be limited, no more than 10 liters of gasoline per a car, spokesmen of the above companies specified.

The government of Ukraine links gasoline shortage to the secret understanding reached among the Russian oil giants. In a move to solve the problem, Prime Minister of Ukraine Yulia Timoshenko pledged Monday to do away with the fuel shortage during a fortnight. To this effect, Ukraine will materially facilitate customs clearing for petroleum import. According to Timoshenko, the Cabinet has submitted to the Supreme Rada a bill on abeyance of duties and all taxes (but for the 20-percent VAT) for imported petroleum.

Kommersant found out that Supreme Rada’s Speaker Vladimir Litvin has agreed with the deputies to consider the bill as a top priority so that it could be passed already today.

Once the bill is passed, the imported petroleum will be able to compete with the fuel produced by domestic refineries of Ukraine. Plachkov assured Ukraine would import from Belarus and the Baltic States as much as 70,000 tons of refined oil in the near term. Plachkov didn’t name the definite suppliers though. The state-run Ukrneft is expected to act as an importer. The gasoline will be sold at the filling stations of Ukrtatnafta and Neftegaz Ukraine.

To avoid petroleum deficit in future, Ukraine will be diversifying the sources of oil shipment to the country, for instance, by entering into a respective agreement with Kazakhstan. Actually Kazakhstan is expected to cover one-third of the country’s needs in petroleum product and become the core supplier of crude to Odessa refinery, which construction will start quite soon, Timoshenko said, promising to launch the works in a year and a half.

Source: Kommersant