The oil market of Ukraine continues to storm. Over the last two days the prices for gasoline and diesel fuel at filling stations increased by 15-50 liter, according to data of consulting company UPECO. 1-2 November, the average price of A-92 reached 26,12 UAH/liter, A-95 – 26,86 UAH/liter, A-95 Premium – 27,97 UAH/l, DT – 24,69 UAH/liter and diesel fuel Premium 26,40 UAH/liter.
But rising oil prices fuels the situation is the devaluation of the hryvnia and significant reduction in the supply of gasoline from Belarus. What is happening in the oil market and whether to expect lower prices in the short term – in the material LIGA.net.
WHERE TO START. Diesel fuel and gasoline started to go up since 8 September. Then the prices increased on average by 10 kopecks./l. Only from September 7 to November 1, the average cost of gasoline A-92 increased by 2,50 UAH/liter, A-95 – 2,40 UAH/liter, A95+ – 2.38 UAH/l, and DT added to 2.94 UAH./L.
Objective there are several reasons: the growth of quotations on oil and oil products on world markets and the depreciation of the hryvnia. In addition, now in Ukraine operates only one refinery, Kremenchug. Others, in particular, Lisichansk and Odessa on repairs. Supply of gasoline A-92 from Belarus to Ukraine in October decreased by 91% – to 4 million tonnes, compared with the average monthly value of the current year. This led to a deficit of A-92 in the amount of 30-35 thousand tons or 40% of consumption of this brand.
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HOW IT DEVELOPED. The deficit will provoke the growth of prices for motor fuel, noted in the Consulting group A-95. The consumption of gasoline A-92 in 2017 is 80-85 thousand tons per month. Of these, imports account for 40 to 45 thousand tons, of which 98% are filled from Belarus. In addition, the collapse of supplies from Belarus was marked for gasoline A-95 to 10.5 thousand tons against the monthly average of 40 thousand tons in 2016. A sharp decline in supply is due to planned repairs at the Mozyr refinery, which began September 10.
Thus, the Antimonopoly Committee of Ukraine decided to explore the market of petroleum products on the subject of anticompetitive concerted actions on the part of the operators station. The Agency has calculated that since the beginning of September the average retail prices for gasoline A-95 rose by more than 5%. “This situation could not remain without attention of the Committee, because the timing of the increase in retail prices of light petroleum products in September 2017 may indicate the presence in the actions of market participants of anticompetitive concerted actions”, – noted in AMKU.
Photos iStock/Global Images Ukraine
WHAT WILL HAPPEN NEXT. After the resumption of supplies of Belarusian oil products, the balance will be redressed, but this is not enough. Director of consulting group A-95 Sergey Kuiun believes that in November the situation in the fuel market will remain tense because of two factors. The first is a new coil of growth of oil prices, the oil is already above $60 a barrel. The second is the lack of gasoline.
“Because of the repair the largest supplier – the Mozyr oil refinery – supply decreased 4-10 times for gasoline A-95 and A-92, respectively. This led to a deficit of 40% of the market in A-92. The lack of A-95 the market is compensated by import from Lithuania. Resource problems will keep the market in suspense until at least mid-November. Prices at filling stations have already increased by 0.5-1 UAH per liter. In case of further growth of quotations of the price correction will continue”, – the expert said in comments to LIGA.net.
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