Meeting of the Working Group on the Liquified Gas Market Situation

Thursday, 31 Aug 2017

Meeting of the Working Group on the Liquified Gas Market Situation

Meeting of the Working Group on the Liquified Gas Market Situation

On Thursday, August 31, a meeting of the interdepartmental task force of the Ministry of Energy and Coal Industry of Ukraine was held. The head of the task force was Ihor Nasalyk.

The meeting was attended by representatives of the Ministry of Infrastructure, the Antimonopoly Committee of Ukraine, Ukrzaliznytsia and Ukrspetstransgas, domestic gas and oil producers UkrGasVydobuvannia and Ukrnafta, industry associations such as
Ukrainian Oil & Gas Association and Ukrainian LPG Association, as well as companies participating in the fuel market.

The main task of the attendees was to study the situation in the liquified gas market and develop a comprehensive proposal for its settlement.

In the opinion of the President of the Oil and Gas Association Dmytro Kulyk, a balanced tax policy, aimed not only at the production of propane and butane, but also at all oil products in general, will help to control the final prices for gas.

“The imbalance between excise duties on gasoline and LPG led to an unjustified growth of the liquified gas market compared to other fuel markets, which in turn increased Ukraine’s dependence on Russian supplies,” Dmytro Kulyk said.
“Our proposal is to develop a balanced excise duty policy jointly with the Ukrainian LPG Association, the Ministry of Finance, and the Ministry of Energy that will eliminate the disproportion and increase the state budget revenues from gasoline sales.”

Another reason for the sharp price hikes was the uncontrolled development of the shady retail market. The parties to the discussion recognized that the existing autogas storage and transportation infrastructure cannot ensure price stability under crisis conditions. The development of gas infrastructure is in turn hampered by illegal players. Therefore, this problem must be urgently addressed at the level of the General Prosecutor’s Office, the Ministry of Internal Affairs, the State Emergency Service and the State Labour Service.

As a result of the meeting, a number of decisions was adopted that should help stabilize the market in the near future.

In particular, on country-to-country basis, negotiations will be held to increase gas supplies from Belarus. An increase in the rolling stock of Ukrzaliznytsya for the transportation of large volumes and the use of Ukrspetstransgas tanks for cargo storage are planned. As a temporary measure, the NBU restrictions on the foreign currency purchase transactions for LNG importers will be lifted. For them, it is proposed to develop special tariffs for the transportation of LPG from the southern ports and temporarily abolish mandatory sampling at the customs, which increases the customs clearance period by several days.

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