Ukrainian fuel market concerned by talk of special importer
KYIV. Oct 24 (Interfax) - Ukrainian fuel market operators are concerned by a halt in clearing gasoline at customs from October 19-23 and the possibility of a special fuel importer being set up with exclusive customs clearance rights.
"We want to confirm this is a problem with absolutely all members," the Ukrainian Fuel Traders Association said in a statement following an emergency session on Tuesday. "The reasons for refusing customs clearance have still not been explained to members, despite the Customs Code obliging customs to notify the reasons for refusal in writing," it said.
But the Association is particularly concerned by "reports unofficially getting through to market participants from regional customs officers that petroleum product imports may again be suspended right after the parliamentary elections, from Monday, October 29, in order to establish the special importer, with exclusive customs clearance rights," the Association said.
The Association said the move could have extremely negative consequences. The fuel market has been stable in the last six years, with not one shortage registered, and prices have always moved in keeping with external market dynamics and the changing tax burden on market participants. The stability of fuel supplies has been brought about by a diversified system of petroleum product supplies by a dozen sources for imports and domestic sales, and by competition among the market's hundred or so participants.
"So any disruption to the established fuel supply system could have nothing but a destabilizing effect and ultimately hurt the consumer. We are concerned by the fact that reports about a petroleum product import monopoly after the elections tally with statements by representatives of the acting government on the introduction on December 1, 2012 of petroleum product import duties, which would also push prices up and wreck the diversified fuel supply system in Ukraine," The Association said.
In view of the seriousness of the risks, the Association has decided to inform the government, the presidential administration and relevant ministries and agencies about the halt in customs clearance from October 19 to 23 and also the embassies of Lithuania, Poland, Romania and Belarus, which export fuel to Ukraine, and the European Commission.
"We're interested in further stability for the market and for members of our Association. And we'll make every effort to preserve the dependable fuel supply mechanism," said Leonid Kosyanchuk, the Association's president.
Press reports said on Monday that customs had stopped processing gasoline on October 19 but that diesel was still being imported as usual. The State Customs Service on October 23 denied there had been any problems clearing imported gasoline through customs. The Fuel Traders Association said customs started letting gasoline through again the same day.
Ukraine imported 60.9% of its gasoline and diesel in January-September.