Ukrzaliznytsia buys winter diesel fuel from Orlen Lietuva for $25 mln

MOSCOW. Nov 22 (Interfax) - Ukrzaliznytsia (Ukrainian Railways) has signed a $25-million contract with the Orlen Lietuva company on the delivery of 14,850 tonnes of F-class (winter) diesel fuel to Ukraine.

The delivery on the FCA Mockava terms will be made before the end of November 2022, Ukrainian media said, citing the Prozorro electronic procurement system.

Ukrzaliznytsia said in comments to the Nashi Groshi media outlet that the approximate contract value of $25 million allows for possible increases in world fuel prices and does not set any exact price per tonne.

In the contract with the supplier, the formula-based price of diesel fuel is tied to the dollar's exchange rate and Platts quotations. As of today, the price on the FBA Mockava terms stands at $1,206 per tonne of diesel fuel, or 44,100 hryvni per tonne, which is $1.02 per liter, or 37.1 hryvni per liter (with a density of 843 kg/m3)

"This is much lower than the retail prices at filling stations and wholesale prices in Ukraine," the Ukrainian company said.

As reported, Ukrzaliznytsia was appointed the state importer of fuel for the economy's needs.

In July 2022, Ukrzaliznytsia and Poland's PKN Orlen agreed on long-term cooperation in diesel fuel supplies. The transition to strategic cooperation has become possible thanks to Ukraine's successful track-record of importing this Polish company's petroleum products in recent months.

Ukrzaliznytsia also has been working with other major suppliers of petroleum products to help provide the necessary amount of fuel to the Ukrainian economy.