22 Nov 2023 09:55

Ukraine's parliament passes law on minimum crude, oil product reserves

MOSCOW. Nov 22 (Interfax) - Ukraine's Verkhovna Rada passed a law on minimum crude oil and oil product reserves in the second reading and in its entirety on Tuesday.

"The goal is to increase the level of Ukraine's energy security and ensure uninterrupted supplies of oil and oil products to the domestic market in the event of a crisis situation on the oil and oil product market," Ukrainian media reported, citing parliament's Telegram channel.

The law stipulates that minimum reserves of crude and oil products are stored as emergency and special reserves that cannot be used for commercial purposes, and must amount to the equivalent of at least 90 days of average daily net imports or 61 days of average daily domestic consumption, whichever is greater. The law also calls for a system of control to monitor the amount, quality and location of reserves.

The Cabinet will approve the procedure for the creation, management and operation of the minimum reserves. The Energy Ministry will manage the reserves, monitor deliveries and consumption, prepare an annual balance sheet and act as the recipient of bank guarantees to ensure fulfillment of obligations for their creation. The ministry will also determine the list and amount of oil and oil products that must be stockpiled by market operators and entities.

The reserves will be kept in tanks that are properly integrated into the relevant logistics and infrastructure networks. They must be replaced at least 30 days before their expiration date and if their quality indicators deteriorate in storage they must be replaced within 10 calendar days of this being established.

The creation, storage, use, renewal, replacement and sale of minimum crude and oil product reserves will be financed with market entities' own funds.

The reserves will be built up gradually and are supposed to reach the targeted level of at least 90 days of average daily net imports or 61 days of average daily domestic consumption in eight years.