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Russia's share in diesel fuel supplies to Ukraine will drop to 15-25%

06 August 2019

Ukraine has shifted its focus to supplies from Belarus, the EU and sea routes

Deliveries of diesel fuel from Russia in August will decrease from 45% to 15-25%, and in September will drop to 10-15%. This was stated by Andrii Herus, the Presidential representative in the government.

“In general, deliveries of the Russian resource will almost halve in August. Deliveries from pipeline transport will be reduced from 200 to 100 thousand tons,” Herus said during a briefing.

Traders are replacing already the fuel from Russia with supplies from Belarus, EU countries (Poland, Lithuania) and shipments by sea. In particular, in August deliveries by sea will increase from 10-20 thousand tons to 60-90 thousand tons. And the Mozyr refinery defers the repairs from September to October, which will allow to increase by 25% the supply of diesel fuel to Ukrainian buyers in August-September – from 180 thousand tons to 250-260 thousand tons per month.

According to Herus, despite the stoppage of pipeline deliveries of diesel fuel to Ukraine in August, "those who made these deliveries are very interested to sell to Ukraine." He said that in July, fuel from the pipeline was pumped into warehouses and oil depots. And, if usually there were 15-20 thousand tons in warehouses, by the end of July there were almost 65 thousand tons.

“That is 45 thousand tons of oil additional pumped in July, precisely because there was no duty in July. That is, the company wants to sell to Ukraine, but does not want to pay a fee to the state budget of Ukraine,” the expert said.

Andrii Herus noted that at the moment in Gomel (Belarus) there is a reboot of the Russian pipeline resource into tanks so as not to pay duties. He noted that Ukraine is not against deliveries from Russia, provided that taxes and duties are paid to the state budget.

Recall that in the spring of 2019, the Russian government tightened economic sanctions against Ukraine, in particular – traders must receive permission of the Russian Ministry of Economic Development for import fuel and coal to Ukraine.

In response, the Ukrainian government introduced an additional duty and quotas for Russian fuel – 3.75% for diesel fuel (pipeline) and 1.75% for liquefied gas.

After that, the largest importer of diesel fuel to Ukraine, the Wexler group, announced the suspension of diesel fuel deliveries from Russia by pipeline transport – due to the establishment of a special duty.

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