UOGA Warns About Potential Budgetary Losses Resulting from Changes in Legislation on Bio-Ethanol Turnover

Thursday, 7 Dec 2017

UOGA Warns About Potential Budgetary Losses Resulting from Changes in Legislation on Bio-Ethanol Turnover

UOGA Warns About Potential Budgetary Losses Resulting from Changes in Legislation on Bio-Ethanol Turnover

The Ukrainian Oil & Gas Association (UOGA) monitors carefully the situation related to attempts of lobbying groups to introduce changes into the legislation in the process of state budget drafting, regarding problems of control over bioethanol turnover.

The President of UOGA, Mr. Dmytrii Kulik, has said that the draft Law on Mandatory Adding of Bioethanol No. 7348 that had been developed by the State Committee for Energy Efficiency and submitted to the parliament signed by 35 deputies of the Verkhovna Rada, included only minor changes proposed by Association experts and market participants. It did not define any criteria that allow adding bio-components into gas and diesel fuel. It did not stipulate specific procedures for compliance control over all market participants regarding requirements to bio-components adding. It did not take into account a possibility of import of gas and diesel fuel, which already contain bio-components.

“We see an intention to remove the bioethanol from the list of goods subject for excise tax payment by changing the codes according to the Ukrainian Code of Foreign Trade Goods (UCFTG), and relieving the bioethanol from licensing requirements and tight control over its turnover. In practice the uncontrolled market is filed immediately with counterfeit goods. Consequently, the prospects include losses for the state budget, extra problems for the industry and problems for customers due to the deterioration of fuel quality at gas stations”, added Dmytrii Kulik.

It should be mentioned that European states have denied long ago the practice of stimulation of bioethanol consumption as a component of motor oils. At the same time, Ukraine moves in an opposite direction supporting investments into bio-fuels manufacturing, which will become obsolete after the change of EU standards.

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