ULIE calls on government to limit fuel imports from Russia, Belarus, Kazakhstan

The Ukrainian League of Industrialists and Entrepreneurs (ULIE) has called on the government to limit fuel imports from the countries of the Customs Union - Russia, Belarus and Kazakhstan.

"We underscore that the competitive advantages of fuel importers from Russia, Belarus and Kazakhstan is based on the access of those countries' producers to cheaper raw materials:," reads a statement by the ULIE's press service.

"We consider it appropriate to immediately introduce safeguarding measures (duties, quotas, licensing) against fuel coming from the countries that have a non-market advantage."

The ULIE notes that with the same price of crude oil, Ukrainian oil refineries are able to withstand competition and not only provide the domestic market with oil products, but also export them.

"Unlike the Customs Union countries, Ukrainian refineries pay the entire duty for Russian oil: If favorable conditions for domestic producers are not created, Kremenchuk and Lysychansk [oil] refineries may halt production this year, and a strategically important branch of economy could cease to exist," the ULIE said.

As reported, Deputy Fuel and Energy Minister Ihor Kiryushyn on December 6, 2010, said that Ukraine was mulling duties on imported fuel of at least EUR 120 per tonne. However, a week after, some mass media published a letter dated December 8, 2010, from Energy Minister Yuriy Boiko addressing Ukrainian Prime Minister Mykola Azarov, which was supported by most of the Ukrainian oil refineries. Boiko suggested levying duties on imported fuel irrespective of the country of origin. He proposed duties to be set at EUR 130 per tonne of petrol, EUR 80 per tonne of diesel fuel and EUR 40 per tonne of liquefied gas. The Ukrainian oil refineries believe that the duties will help boost oil refining and encourage the modernization of refining facilities.

At the same time, the Finance Ministry and the Economic Development and Trade Ministry believe that the duty could affect the Ukrainian fuel market, considerably reducing the import of oil products, and cutting tax receipts to the national budget.

Ukraine's large gas station chains, which mainly import fuel, also criticized the introduction of the duties, stressing that the measure would translate into the monopolization of the market by the Ukrainian oil refineries, as well as trigger price hikes of fuel to UAH 112 per liter for A-95 petrol and to UAH 9.10 per liter for diesel fuel given the current prices of oil in the world. Concern over possible duties was expressed by the embassies of Lithuania, Romania and Poland in Ukraine in a letter addressed to the Ukrainian prime minister.


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