Ukrainian Oil & Gas Association Appeals to Prime Minister to Block Russian Fuel Imports
The Ukrainian Oil & Gas Association (UOGA) has appealed to Prime Minister Denys Shmyhal to ban the import of oil products of Russian origin and to introduce criminal liability for officials who facilitated or allowed the importation of Russian fuel into Ukraine.
The UOGA expressed serious concern about the threat to the stability of the Ukrainian fuel market, which is created by the increase in the import of autogas and diesel fuel of unknown (probably Russian) origin. This would lead to the destruction of the diversified supply system of motor fuels and undermine the energy security of the country.
The war in Ukraine led to the construction of a completely new fuel market, with supplies from Europe and other countries replacing Russian and Belarusian oil products. The market was built in a matter of weeks amid constant shelling, poor logistics, and the unpreparedness of the European market for such a high demand. The market was built thanks to the coordinated work of citizens, the stability of Ukrainian business, and the help of European partners.
However, Russian fuel again threatens the stability of the Ukrainian market. According to estimates by the Consulting Agency “A-95”, the share of autogas supplies with signs of the content of a Russian resource has already exceeded 50% of the total volume of imports due to price dumping. This makes it economically impossible to import non-Russian autogas, which has already led to a critical reduction in its supply. Similar processes are taking place in the diesel fuel market. The flow of the resource of dubious origin intensified after February 5, when the European embargo on the import of Russian oil products came into force. Discounts on Russian fuel reach $200/t, or 25% of alternative options, prompting unscrupulous traders to look for ways to supply it to Ukraine.
To ensure the energy security of the country, the UOGA proposes comprehensive measures, namely:
- Ban the import of oil products of Russian origin into Ukraine by amending Resolution No. 1147 of the Cabinet of Ministers of Ukraine dated December 30, 2015.
- Release goods of unknown origin into free circulation in the customs territory of Ukraine subject to payment of a special duty of 50% of the value of the goods if the country of origin cannot be reliably established (absence of a properly executed certificate of origin of the goods).
- Introduce criminal liability for officials who facilitated or allowed the importation of goods originating from the Russian Federation into the customs territory of Ukraine.
With the beginning of the Russian invasion, the Ukrainian government and fuel market operators made an enormous effort to turn the market of petroleum products by 180 degrees and completely got rid of fuel supplies from the aggressor’s country. Ukraine cannot afford to lose this gain.
The Ukrainian Oil and Gas Association represents the interests of the largest players in the oil and gas market, including the largest wholesale, retail, mining, and processing enterprises, representing national, international, private, and state business. Some of the association’s members include WOG, OKKO, Shell, AMIC Ukraine, SOCAR, KLO, UPG, Parallel, and Ukrgazvydobuvannya. The association takes an active part in developing the legislative framework of the country, monitoring and solving problematic issues of the industry, and actively interacts with state authorities, private and state enterprises, industry and consumer associations, consulting agencies, and the media to implement and comply with European standards of service quality on the market, as well as protecting the interests of the association’s members.