KYIV, Sept 20 – In light of rising prices for petroleum prices, the Cabinet of Ministers has asked that Parliament approve a draft law granting the Cabinet the right to regulate petroleum product excises, said Deputy Economy Minister Oleksandr Shlapak, during an appearance in parliament, Ukrainian News reported.
“We (the government) literally ask you (deputies) to grant us this right,” said Shlapak.
Shlapak said that the function of making decisions on petroleum product excises should be transferred to the Cabinet because of the need to promptly react to changes in the market.
In previous gasoline crises, the Cabinet appealed three times to Parliament to grant it the right to regulate excises, but Parliament rejected the proposal.
A law adopted by Parliament on March 2 introduced the import duty breaks for diesel fuel and gasoline until July 1. However, on June 13, Parliament extended the import duty break on diesel fuel until October 1 at the request of the government ministers in charge of the agricultural sector.
Meanwhile, over the Monday-Tuesday period this week, the large wholesale price of diesel fuel rose another 7-8 percent from Hr 1950-2100 per ton to Hr 2000-2200 per ton due to the market’s agitation before rise in excises set to take effect October 1, and the petroleum crisis in Europe, say petroleum traders.
Gasoline prices also continue to grow slowly during this period, rising 3-5 percent.
According to the traders, the market is feeling a shortage of diesel fuel due to the low import and production levels.
“Kremenchuk and Kherson are not shipping. Lysychansk is shipping, but it is not enough. Meanwhile, practically not diesel fuel is being shipped from Russia and the Baltic countries,” said the manager of one company.
Traders are preparing for a significant jump in prices because of the increase in excises, while rising prices in Ukraine are being spurred by the continuing increases in the price of petroleum and petroleum products in Europe and Russia.
“Privileges will be cancelled as of October 1. This has a psychological influence,” said the manager of an importing company.
“There is a shortage caused by the agitation. Some traders are not selling because they expect a price increase or are sending (petroleum products) for export. One should not say that there is no diesel fuel at all,” said Yurн Nepomnyaschy, the deputy general director of Atek-95.
The market’s agitation is also being caused by rumors of a possible extension of privileges for diesel fuel imports and production.
“Rumors are circulating that privileges will be extended. This also destabilizes the market,” said the manager of the importing company.
According to the manager of one company, gasoline prices are rising much more slowly, due to its lower demand compared to diesel fuel.
In the opinion of the traders, the price of petroleum products will most probably continue to grow.
Last week, the large wholesale price of diesel fuel jumped sharply by 20-25%, from UAH 1570-1590 to UAH 1950-2100 per ton. Prices for diesel fuel began to rise at the end of August. Before this, they had been stable since mid-June.
Gasoline prices have risen slowly since the end of May due to the end of tax breaks and the shortage.
