Ukraine's boycott against Belarusian diesel fuel

The boycott of Ukraine is the result of Belarusian BNK oil trader's attempt to gain more profit by increased diesel fuel prices.

Three largest Ukrainian fuel operators, as well as WOG and OKKO, the largest consumers of Belarusian oil products, refused to sign annual contracts. Ukraine's Oilnews referring to its sources in the market reports that Ukrainians are not satisfied with high prices.

WOG and OKKO are owners of the largest networks of fuel stations in Ukraine. WOG (Kontinium group) is owned by Igor Eremeev, Vitaly Antonov (OKKO) is the owner of the Galnaftogaz concern. WOG takes 69th place; OKKO takes 55th place in the Ukrainian Forbes list respectively.

No one provides any comments on whether they renegotiated contracts last week. In any case the situation has a bad impact both on the Belarusian supplier and the entire country's economy. Belarus is the largest supplier of oil products to Ukraine. Based on results of 2014, deliveries from Belarus made up about 50% of total consumption, "Ezhednevnik" reports.

In April at the Belarusian Oil and Gas conference in Minsk BNK representative Siarhei Hryb stated that based on results of 2015 the company was planning to increase the export of petroleum products to Ukraine by 41% (from 7.8 mln up to 11 mln tons).

Ukrainians believe the current price increase is connected with low economic viability of oil products to the Russian market. Due to low prices all deliveries were discontinued in March.

"We have temporarily stopped deliveries. Deputy Prime Minister Uladzimir Siamashka says "if market conditions change and prices increase on the Russian market, oil products will be supplied to Russia. In response, Russian authorities promised to cut oil supplies for Belarusian refineries. As a result, in April deliveries of Belarusian fuel to Russia resumed.

On the other hand, since the beginning of 2015 the Ukrainian market has suffered the decrease of economic viability. According to the National Statistical Committee of Belarus, in January-February this year Ukraine was delivered 436 thousand tons of oil products, in the same year period 2014- 421 thousand tons. Value of exports decreased by 61.9% because the average fuel prices plummeted. For the first two months of 2015 the exports amounted $245.5 million, in January-February 2014 it fixed at $397 million.