Media outlook in December 2009 | |||
Ukrainian oil is mixed with import one
On December 23, the Cabinet of Ministers passed a decision of pegging prices for Ukrainian oil sold on auctions to the customs value of imported oil. Thus the government is trying to prevent abuses in the course of selling of hydrocarbons. The market participants support the government’s decision.“Since 2008, Ukrainian oil auctions became fictitious. Their regulations and terms of crude purchase are arranged in such a way that only a company affiliated with an oil seller can win the “bid”, Dmitry Zverev, Press Secretary of TNK-BP Commerce LLC noted. “This oil can hardly be bought at all since each time there is a reason preventing it from shipment. Usually, a certificate or another document is missing,” Mykola Pashynsky, the Premier’s Advisor and member of the Verkhovna Rada’s Committee for Heat and Power Complex, said. “Oil players used to raise this problem for a long time now, in particular being concerned with violation of competition that occur during the oil supplies to the refineries. I think that the government have considered the opinion of experts and of majority of the market participants”, Valery Ryasik, Press Secretary of LUKOIL-Ukraine, shared his thoughts. “As a result of the artificial constraint of the competition the oil is sold at the prices that are by a third lower than the market prices, which caused the state to lose UAH 7b since the beginning of the year”, Sergiy Kuyun, Director of A-95 Consulting Company confirmed. He noted that in general the Ukrainian oil is of higher quality than the Russian oil, therefore, it must be sold at the prices that are 20-25% higher. “That’s why the current decision is a certain compromise”, Mr. Kuyum believes. “In order to finally settle this issue not only the oil pricing scheme must be changed, but also the scheme of its supply to Ukrainian refineries.”
Source: Kommersant-Ukraine