Working Meeting of Members of the Oil & Gas Association

Thursday, 14 Dec 2017

Working Meeting of Members of the Oil & Gas Association

Working Meeting of Members of the Oil & Gas Association

On December 12 the Ukrainian Oil & Gas Association held a regular working meeting of members, the agenda of which included discussion on the following issues.

One of the key entities in the industry, the leader of innovative approaches to business processes in the state-owned sector, PJSC UkrGasVydobuvannya, has joined the ranks of the largest industrial association. The fact that the state-owned gas production and processing company has joined Association members demonstrated evidently that the UOGA strived to represent not only interests of the private businesses, but also of the industry as a whole, and to assist in development of Ukraine as a self-sufficient and energy-wealthy state.

The Rules of Operation of Committees, Commissions and Working Groups of the Association were approved with the objective to improve the operation efficiency. The draft regulation on main operation aims for 2018 was discussed.

Once again, participants of the meeting failed to agree on signing the Memorandum with Anti-Monopoly Committee on joint activities for establishment of a favourable environment for development of a fair competition on the oil and gas market. Unexpectedly for Association members the regulator has made an amendment to the text on admissibility of additional requests from local divisions of the Anti-Monopoly Committee of Ukraine (AMCU). One of the major objectives of Memorandum signing is to simplify the mechanism of data submission by operators of the wholesale and retail trade of petroleum products though Internet, which is required by the Committee for market analysis. UOGA members believe that the introduced changes in no way simplify or accelerate the procedure of preparation, processing and transfer of the information.

A separate discussion was held on the problems, which might arise on the market as a result of adoption of the “bioethanol” law.

The Ukrainian Oil & Gas Association raised multiple concerns about the insufficient quality of preparation of this legislative act. The draft Law No. 7348 developed by the State Committee for Energy Efficiency and presented to the parliament by the group of deputies does not include such important issues as clear procedures of control over the mechanism of bio-components adding, responsibility of bio-fuel producers for manufacturing of low-quality goods, impossibility of fulfilment of requirements as to adding the bio-components into A-92 gas, and does not take into account a possibility to import gas and diesel fuel that already contain bio-additives.

Consequently, if the mentioned law will become effective, the market will be flooded by bootleg fuel, importers will be in unequal conditions compared to large local producers and will have to invest millions of Hryvnas into establishment of the necessary infrastructure, this will be definitely reflected in retail prices for end-consumers and create preconditions for the inflation increase.

According to expert estimates Ukrainian production capacities are not sufficient to cover even a half of the national demand, and, consequently, the “bioethanol” law will have no influence at the reduction of dependence of Ukraine on the petroleum products’ imports.

Taking into account all these factors, members of the Ukrainian Oil & Gas Association have harshly criticised this draft law. The Association plans to attract all available resources to prevent adoption of the draft law in this revision.

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