Diesel supplies from Belarus will not save Ukraine from rising prices
The Ukrainian government plans to compensate for the decrease in diesel fuel supplies from Russia with supplies from Belarus, which will increase them by 25% in August.
This was stated by Vladimir Zelensky’s adviser on energy sector issues Andriy Gerus, a PolitNavigator correspondent reports.
“The Mozyr Oil Refinery is postponing its repairs from September to October and increasing diesel supplies to Ukrainian customers by approximately 25% in August and September. If previously they were approximately 180 thousand tons per month, now they will be 250-260 thousand tons per month,” Gerus said.
The Russian Kommersant expresses doubts about the figures given by the Ukrainian official and recalls that back on July 30, the Belarusian Oil Company (BNK), on the contrary, expected a reduction in exports to Ukraine.
BNK planned to increase exports only in August - up to 220 thousand tons with an average monthly figure of 180 thousand tons. As Sergei Grib, deputy general director for commercial issues at BNK, said, exports will decrease in September-October due to planned repairs of the plant and harvesting in Belarus.
In any case, fuel from Belarus will be supplied by rail, which will lead to higher prices.
“Most likely, retail prices for gasoline and diesel in Ukraine will increase in the very near future, since special duties will be reflected in the final price. Indeed, Russian companies remained the main supplier of diesel to Ukraine. Now their free volume will be redirected to other markets,” said Andrey Gordeev, an expert at the Center for Industrial Economics NIFI, in an interview with FBA Economics Today.
On July 1, a ban on the supply of crude oil from the Russian Federation to Ukraine came into force. In addition, according to the decree of the Russian government, in order to supply diesel fuel and gasoline, it is necessary to obtain a special permit from the Russian Ministry of Economic Development. In turn, Kyiv introduced a special duty of 1% on diesel fuel supplied by pipeline transport from August 2019, 3,75, and from October 1 it will be 4%.
As a result, pumping in this direction, which was carried out by the Wexler Group and Proton Energy Group, stopped. Rosneft fuel was supplied through the pipeline, and such deliveries in the first half of the year amounted to 1 million tons - this is about a third of the total diesel fuel consumption in Ukraine (3,18 million tons).
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