Yushchenko Assails Own Oil Policy

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko signed into law on Wednesday a bill allowing duty-free imports of oil products, but blamed his government for shortages and rising prices gripping the country.

Parliament on Tuesday voted overwhelmingly to remove duties from imports to tackle the country's fuel crisis.

Yushchenko said his government had acted "in far from the best fashion" in its initial steps, including a freeze on prices and a ban on exports.

"Ukraine was two to three weeks behind in adopting a proper and publicly stated means of regulating the crude oil and oil products market," Yushchenko said in a statement.

"Today the president and the government have said once and for all that nobody will regulate prices in Ukraine by administrative means."

Prime Minister Yulia Tymoshenko accused Russian oil companies, which control four out of six Ukrainian refineries, of unjustifiable price rises. The government froze oil products prices until June 1 to help farmers with the sowing campaign.

Russian oil firms said higher world oil prices were behind increases in Ukrainian retail prices. Motorists have been forced to join long lines at gasoline stations, which have imposed strict limits on sales per customer.

In addition, two of Ukraine's major refineries are closed for maintenance at a time when demand for fuel usually increases due to demand from the farming sector. Lysychansk oil refinery, controlled by Russia's TNK-BP, would resume operations next week.

Yushchenko said a government delegation would fly on Thursday to Libya for preliminary agreements on oil supplies.

Source: Reuters