Supply of auto fuel from Belarus
The trade representative of the largest in Belarus Mozyr oil refinery - the Belarusian Oil Company (BNK) - does not confirm the supply of A-95 gasoline for Ukrainian counterparties in June, enkorr reported, citing the holders of TERM contracts for the supply of gasoline from BNK. The A-92 will be delivered in full, the publication specified. The volume of average monthly supplies of Belarusian A-95 gasoline this year amounted to 55 thousand tons, about half of the entire market for this type of fuel.
"Like other counterparties, we received a notification that in June there will be no supplies of A-95 gasoline under TERM contracts to Ukraine. Belarus is the largest supplier of A-95 gasoline under TERM contracts to Ukraine. Yes, it was quite unexpectedly cut off," said Serhiy Fedorenko, Commercial Director of Ukrgasvydobuvannya JSC (Shebelinsky Oil Refinery and U.Go gas station network). The Naftogaz Group is a counterparty to BNK and buys fuel from it for trading operations.
Our interlocutors note that a decrease in the volume of supplies of Belarusian fuel to Ukraine has been observed since May. In particular, diesel fuel supplies under long-term contracts did not exceed 70% of the contracted volumes. "I do not see politics in this and am inclined to believe that this is happening for economic and technical reasons," Fedorenko said.
Belarus is cutting exports in order to cover the needs of the domestic market, including due to the lack of supplies of Russian oil to the Naftan refinery, which came under sanctions, the expert is sure.
The fact is that the second-largest refinery in Belarus Naftan is on the verge of a shutdown due to a lack of raw materials. Russian companies are afraid to supply oil to it, fearing to fall under sanctions, as counterparties of the sanctioned enterprise, director of the A-95 consulting agency Serhiy Kuyun told. "Starting next week, the Mozyr Oil Refinery is going to schedule repairs, which was announced at the beginning of the year. If Naftan does not start up, Belarus may find itself in a situation of shortage of motor fuel on the domestic market. For this reason, they decided to suspend exports," he says.
At the same time, in previous years, if the Mozyr refinery stopped for repairs, supplies could be reduced, but they continued. At the same time, there are no reserves of A-95 gasoline in Ukraine. They are not made, since gasoline is a troublesome storage position: it requires special tanks with pontoon roofs since gasoline evaporates easily. As a rule, gasoline is operated from wheels, unlike diesel, Kuyun told.
Many saw in what was happening the desire of the Belarusian authorities to punish Ukraine for its position on the issue of air traffic, which was interrupted. As you know, Belarus yesterday made a decision on the regime of individual licensing for the import of a number of Ukrainian goods: confectionery, chocolate, juices, beer, agricultural machinery.
But the interlocutors of 112ua.tv are inclined to believe that there is no policy in the situation with auto fuel. “The Belarusian side itself is unlikely to dare to restrict or completely refuse the supply of auto fuel to Ukraine, in my opinion. For Belarusian fuel, the Ukrainian market is a premium. fuel supplies, economic losses for it would be higher than for Ukraine. Traders will rather quickly switch to other directions of imports or purchases from domestic producers, and everything will go on as usual, but without Belarus," Fedorenko said.
The fact that, most likely, this is actually the case is evidenced by the statement of the BNK. The deputy general director of the company in a commentary to the newspaper "Left Bank" said that BNK does not intend to stop the supply of A-95 gasoline to Ukraine and can only reduce their volumes due to repairs at the Mozyr oil refinery.
The further development of events will depend on the results of the negotiations that are taking place in Sochi between the presidents of the Russian Federation and the Republic of Bashkortostan Vladimir Putin and Alexander Lukashenko. If based on their results, a decision is found on how to load Naftan with oil, supplies to Ukraine will resume, experts, are sure.
Will there be a shortage of A-95 gasoline at filling stations and what will happen to prices?
In the context of the current events, two scenarios are most likely today. “If positive, the presidents of Russia and Belarus will agree on the methods of supplying Russian oil, despite the sanctions, and the situation will quickly improve. gasoline) will have to be left without the Belarusian A-95, this is two to three weeks of June. A pricing rush and an increase of hundreds of dollars/ton in the wholesale price should not be expected, but spot lots (sold from wheels) can really grow in price. increase in the volume of supplies by sea. I do not exclude that we will see a return to the Ukrainian market of Russian refineries, which recently did not supply gasoline to Ukraine," says Fedorenko.
According to the director for commercial issues of JSC "Ukrgasvydobuvannya", the basic consumer will be protected by state regulation. “Those gas stations that will not be able to fit into the margins stipulated by the maximum prices due to the increase in the cost of wholesale spot consignments will most likely stop sales of base A-95 gasoline and continue to trade premium gasoline, which does not apply to the principles of state regulation. But this is definitely not the majority. Many gas stations will be able to maintain the offer of the basic A-95. In addition to the gas stations of the domestic chains "Privat" and "Ukrgasvydobuvannya", there are discounters that sell auto fuel with minimal margins. fuel at the oil depots. They will definitely be able to ensure the availability of the base A-95 within the prices set by the state," says Fedorenko.
Ukrtatnafta has already issued a statement, which says that the company can fully cover the shortage of Belarusian gasoline on the domestic market if supplies from Belarus are cut off.
"Tragedy will not happen. There are current supplies from alternative directions. I think that now the market will quickly contract and import additional volumes by sea. If there is a gap, it will not be long - a maximum of a week or two. When there will be some turbulence. But a global crisis will not provoke this," Kuyun agrees. The expert also does not exclude that those gas stations that cannot meet the limit prices will refuse to sell the base A-95 and will trade only premium fuel. But we are clearly not talking about most gas stations.
BNK also cut off to zero the supply of autogas under TERM contracts from the Mozyr Oil Refinery. At the same time, according to traders, supplies from the Rechitsa Gas Processing Plant, the main supplier of Belarusian autogas, remain unchanged, A-95 expert Artem Kuyun told. "The absence of terms from the Mozyr Oil Refinery will not have a big impact on the price situation, since these volumes are insignificant in the supply structure of the Ukrainian market. In contrast to previous years, the market demonstrates a high level of diversification of gas imports, so Mozyr gas will quickly be replaced," the expert is sure.
Ukraine may refuse Belarusian oil products
"The current situation is another argument in favor of the expediency of approaches, in which Ukraine will stimulate a gradual refusal to supply fuel from Belarus and reduce dependence on repairs in neighboring states," Fedorenko said.
According to him, this can be done, in particular, through the establishment of duties, which would serve as a factor in the growth of supplies by sea, increase in production in the country. The duty, if set for fuel imported from countries with which Ukraine already has unstable political relations (Russia and Belarus), would create good conditions for deliveries by sea (taking into account the logistics costs to the central regions of Ukraine).
"It is possible to minimize the increase in prices for the end consumer in retail using an integrated approach. Simultaneously with the introduction of the duty, it is possible to reduce the amount of excise taxes for gasoline from 213.5 to 150 euros/thousand liters, with a compensatory increase in the excise tax for autogas from about 52 to 100 euros/thousand liters. One of the comprehensive measures may be to restrict the sale of condensate only for licensees who produce excisable goods. It is also necessary to amend the legislation to streamline the issue of paying excise taxes on solvents (which are used to increase the octane number and manufacture "fuel" gasoline, which minimizes the payment of the excise tax). I am sure that if this approach is implemented, the state should return to the issue of the formation of minimum fuel reserves," Fedorenko claims.
He noted that the issue of the need to apply certain parts of this approach has been repeatedly discussed in the government offices. But around each of them, there is a struggle by several parties at once, associations, individual market participants. "In particular, most of the members of the Oil and Gas Association of Ukraine are against the introduction of any duties, which, in their opinion, will restrict competition and give additional advantages to domestic producers," the expert said.