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12 May, 2021 11:59

Ukraine on verge of fuel crisis: Politically driven decisions to stop imports from Russia & Belarus may lead to shortage – expert

Ukraine on verge of fuel crisis: Politically driven decisions to stop imports from Russia & Belarus may lead to shortage – expert

Ukraine needs to strike a deal with Moscow to import Russian oil, or the country could soon face an acute shortage. That’s according to the Chief Commercial Officer of UkrGasVydobuvannya, a Kiev-based energy producer.

Speaking to online outlet Ukrainian News last week, Sergey Fedorenko explained that the political decision to stop buying oil from Russia and Belarus could have severe consequences for the country. A deal needs to be made with Moscow soon, or the problem will only get worse, he believes.

In recent weeks, Kiev has lost much of its fuel supply. On April 1 this year, the Swiss company Proton Energy entirely ended its oil supplies to the country. Since 2016, the company has been the only supplier of Russian energy giant Rosneft’s products to Ukraine, and made up almost a quarter (23.4%) of the country’s entire diesel imports, and 22.3% of purchased liquefied gas. The decision to stop sending energy to Kiev was made after the Security Service of Ukraine recommended that other companies stop cooperating with Proton Energy.

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These issues were made worse later that month, following renewed US sanctions against Belarusian enterprises. Russian pipeline transit company Transneft, which supplied the Vitebsk Naftan Refinery, temporarily stopped selling its oil. This exacerbated the issue in Ukraine, which receives more than half of its diesel from its northern neighbor. Furthermore, another facility in Belarus, the Mozyr Refinery, is undergoing repairs.

“The [Ukrainian oil refining company] Ukrtatnafta said that it will increase diesel fuel production, and there will be sea deliveries, so everything will be fine,” Fedorenko told Ukrainian News. “But I am inclined to believe that there will still be a shortage.”

The lack of imports now means that Ukrzaliznytsia, the country’s government-owned rail company, has no fuel, and doesn’t have enough tank cars for transporting diesel that arrives at ports.

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According to Fedorenko, it will be difficult for Ukraine to completely move away from imports from Russia and Belarus, but the country needs to work towards no longer relying on their two neighbors.

“It’s not a question of giving up, but of not being dependent,” he explained, noting that Belarus and Russia combined supply 47% of all Ukraine’s energy imports.

“These countries have developed oil production and refining and are the closest to us, and it is clear that they will always be cheaper.”

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