Order of the Infrastructure Ministry May Result in Blockage of the Fuel Market

Tuesday, 15 Aug 2017

Order of the Infrastructure Ministry May Result in Blockage of the Fuel Market

Order of the Infrastructure Ministry May Result in Blockage of the Fuel Market

As revealed, starting September 1, 2017 some companies that are members of the Ukrainian Oil and Gas Association, may stop their usual operations due to the Order of the Ministry of Infrastructure according to which dangerous cargoes and waste can be transported by railways only subject to a license.

The State Service of Ukraine for Transport Service subordinated to the Ministry is authorized to issue the license. To receive it, the company needs to set the rules, collect a number of documents, and hire an employee, if there isn’t any, with the specific professional qualification to be in charge of arrangement of dangerous cargoes transportation.

It all would be nothing, but the obscure wording of the Order gives reasons to believe that officials will demand the license starting the 1st of September not only from transport companies, but from consignees/consignors as well. During our conversation a representative of the Service for Transport Safety confirmed these intentions.

Meanwhile, this Order, as it has already become customary, contradicts a whole range of existing laws and regulations.

In particular, the Law of Ukraine On the Transport of Dangerous Goods clearly specifies that transport companies that carry out this activity based on a relevant license, are the transportation subject. Retailers of petroleum products do not carry out this type of activity.

The Law On Licensing of Types of Economic Activities provides for the period during which changes in the field of licensing should be implemented. Business entities in this case are given at least two months to implement the new rules.

It is interesting that due to this legal conflict, companies that are not residents of Ukraine and are involved in the process of petroleum products supply to domestic refineries, will not be able to obtain a license at all because they are not able to provide certain documents from the mandatory list. In Ukraine, imported fuel takes about 80% of the market. There will be nobody to import fuel.

The Oil & Gas Association insists that the system of legal regulations cannot contain discrepancies and inaccuracies. If there are obvious signs of monopolism in the Ukrainian petroleum products market, this double interpretation of main laws can lead to corruption manifestations and block the work of the domestic fuel market as a whole.

At of now, we sent official appeals to the Minister of Infrastructure and Prime Minister of Ukraine, to ministries, international business organizations with request to draw attention to the obvious obstruction in the work of operators of the oil products market.

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