Ukraine’s seaports, whose share in import deliveries of diesel fuel is rapidly growing amid the introduction of duties on Russian resources supplied by pipeline, will have to accept a record volume of diesel fuel in the amount of 150,000 tonnes in October, director of A-95 Consulting Group (Kyiv) Serhiy Kuyun said on Facebook.
According to him, to date, the record volume fixed in the autumn of 2015 was 130,000 tonnes.
Kuyun said that in September the share of seaports in the structure of import deliveries was 20%, whereas a year earlier it was 10%. The share of fuel supplies from Belarus is 53% (against 36% in September 2018), Russian deliveries by rail 6% (against 3%), Russian deliveries through Gomel 12% (against 9%), and Lithuania’s share some 9% (against 8%).
“After the tense first half of September, when the price of diesel fuel increased by more than 11% due to deficit, the market was balanced by the end of the month even with a slight surplus. It will come in handy in October, when supplies from Belarus are expected to fall due to the halt of Mozyr oil refinery,” the expert said.
The required amount of fuel, he said, will be covered by increasing supplies through seaports, oil refining by Ukrtatnafta, and railway deliveries from Russia.
Commenting on the market price situation in September, he noted that the cost of diesel fuel is not yet striving to decrease.
Estonia’s Skywalk Trading OÜ has asked Chairman of the Verkhovna Rada committee for energy and utilities Andriy Gerus and Head of the State Customs Service of Ukraine Maksym Nefyodov to interfere in the situation with locking a batch of diesel fuel made by Εlefsina refinery belonged to Hellenic Petroleum (Greece) at the Pivdenny seaport (earlier Yuzhny, Odesa region).
According to the text of Skywalk Trading’s letters to Gerus and Nefyodov, on August 25, 27,000 tonnes of diesel fuel was delivered to the seaport, which, after passing through all customs procedures, was shipped to port tanks in the customs warehouse mode. Later, on September 11, the State Customs Service of the State Fiscal Service (SFS) suspended the registering of fuel for analysis of sulfur content in it. On September 13, the company was refused to clear the batch due to exceeding the sulfur content requirement by 0.00001 percentage points.
So, according to the conclusion of the analysis of samples performed by the department of tax and customs examinations of the SFS, the sulfur content was 10.1 ppm (with a limit value of 10 ppm). This contradicts the quality certificate of the manufacturing refinery and the conclusions of international survey companies – Intertek, SGS and Saybolt. In accordance with their data obtained in the analysis of fuel during its discharge into tanks at the Pivdenny port, the sulfur content in the fuel varies between 9.4–9.6 ppm.
Despite the fact that the results of the analyzes of the SFS department contradict the manufacturer’s quality certificate and the conclusions of three international survey companies, and the recorded excess of the sulfur content is within the technical error of the device, the Energy Customs refused to re-analyze it and actually blocked 27,000 tonnes of fuel in reservoirs of the port,” the company said in the text of letters.
Skywalk Trading OÜ asked the officials, within their powers, to help resolve this situation, namely, to conduct a new sampling and research of diesel fuel from the Εlefsina refinery in any other state-owned laboratory with the involvement of international survey companies and any independent observers to ensure transparency and publicity of this process.
The diesel fuel deficit in September may reach 60,000 tonnes, which is about 10% of the expected volume of consumption, said A-95 consulting group Director Serhiy Kuyun. According to him, the deficit, in particular, is facilitated by the actions of the Energy Customs, whose inspections suspended the shipment of imported diesel fuel at Yuzhny port.
“Yuzhny has stopped. It’s the second most powerful sea transshipment in Ukraine. One day’s worth of fuel shipment remains. The tanks contain 27,000 tonnes of diesel fuel from Greece, which have been transported here for several years. According to the latest data, the energy customs is preparing refusal documents for registering this batch … But the problem is that these 27,000 tonnes clogged the terminal, making it impossible to receive two more tankers carrying 30,000 tonnes scheduled to arrive in the second half of September. There is also decline in shipments from Belarus and still an empty pipe from Russia,” he said on Facebook.
Kuyun on Wednesday said due to the shortage the rush component in the price of railroad batches of diesel fuel reached UAH 2,900/t, an increase of more than 10%.
Ukrzaliznytsia is currently considering the possibility of entering foreign markets for the purchase of diesel fuel from direct producers, according to a press release from the company.
“In addition to expanding the circle of suppliers, this will allow removing significant pressure on domestic prices in Ukraine, which often takes place when the company purchases diesel fuel,” chairman of the board Yevhen Kravtsov said.
He noted that Ukrzaliznytsia consumes 10% of the total volume of this oil product, currently sold in Ukraine.
Kravtsov stressed that in order to avoid sharp price fluctuations in the domestic market of petroleum products, Ukrzaliznytsia should have foreign alternative supply channels, in particular, for diesel fuel.
“Our purchase of even 100,000 or 200,000 tonnes is not so decisive to cause price fluctuations [in the external market] as it is happening in Ukraine now,” he said.