The A-95 Consulting Group notes that the increase in the import of LPG and diesel fuel of dubious origin threatens to destroy the diversified supply system of motor fuels, and accordingly undermines the energy security of Ukraine.
This is stated in the message of the group, Ukrainian News Agency reports.
"The situation is already critical on the liquefied natural gas (LPG) market. According to A-95 estimates, the share of LPG supplies with signs of Russian resource content has been actively growing since June 2022, and in February 2023 it exceeded 50% of the total volume imports. LPG produced by European factories is currently worth USD 300 per ton or 30% more expensive than gas mixtures with all the signs of Russian origin. This dumping makes it impossible to import non-Russian LPG, which has already led to a critical reduction in its supplies. At the beginning of March, it effectively disappeared import of gas from Romania, which in 2022 was one of the main sources of filling the market of Ukraine," the message says.
It is noted that the next stage will be the rejection of long-term contracts for the supply of gas from Europe and the lease of foreign logistics infrastructure.
"Ukrainian companies have spent many months searching for rolling stock, terminals, and booking transportation schedules in the complex EU transport system. These gains for the sake of building a new LPG supply system to Ukraine may be lost," says Artem Kuyun, an analyst at the A-95 Consulting Group.
Similar processes are also taking place in the diesel fuel market.
"The flow of the resource of dubious origin intensified after February 5, when the European embargo on the import of Russian oil products came into force. Discounts on Russian fuel reach USD 200 per ton or 25% of alternative options, which prompts many traders to look for ways to supply it to Ukraine. the sources of supply of dubious LPG are Lithuania, Latvia and Poland, of diesel fuel - Turkey, Egypt. Experts expect that discounts on Russian oil products will grow, because its surplus in Europe and the Black Sea is increasing. The prices of diesel fuel will also be affected by the expected lowering of the price "ceiling" within the framework of EU anti-Russian sanctions," the message reads.
The message states that the situation requires urgent changes to the legislation.
"In particular, it is about the introduction of oil product codes in Cabinet Resolution No. 1147 of December 30, 2015, which introduces a ban on the import of goods of Russian origin into Ukraine. The next step should be the introduction of a barrier duty on fuel of uncertain origin, the scope of which would eliminate the price advantage of the Russian resource. Also, according to analysts, fuel certification needs additional control," the report says.
In particular, according to the notification, it is necessary to establish continuous cooperation with the issuers of certificates of origin in the fuel supplier countries to determine the authenticity and number of issued certificates.
"In 2022, the Ukrainians did the impossible - they built a new fuel supply system, getting rid of 100% of the pre-war sources of filling the market. We became the first country in Europe to give up Russian fuel. But now we risk losing this gain, which cannot be allowed in any way. Trade in fakes and in tax evasion schemes, shady people get an advantage from UAH 3 to UAH 12 per liter and increase sales volumes. At the same time, honest market participants are forced to increase trade mark-ups to compensate for the outflow of sales. State regulation will only intensify this situation, hitting the "white" business, and push the market is even stronger in the shadow," said Serhii Kuyun, director of the A-95 Consulting Group.
As Ukrainian News Agency earlier reported, on Tuesday, March 14, compared with Monday, March 13, the average prices at the largest gas stations in Ukraine for Euro-LPG decreased by 1.8% to UAH 22.72 per liter, for Euro A-95 gasoline remained at UAH 48.66 per liter, and for Euro diesel fuel remained at UAH 50.00 per liter.
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