Ukrainian oil producers ask the government to investigate anti-competitive practices of Russian fuel producers

Jan 22, 2020 | Category: Official
Ukrainian oil producers ask the government to investigate anti-competitive practices of Russian fuel producers

Leading Ukrainian oil producers - Ukrtatnafta, Ukrnafta and Ukrgasvydobuvannya, guided by the Law of Ukraine "On protection of national commodity producer from subsidized imports" and norms of the World Trade Organization, informed the Ministry of Economic Development, Trade and Agriculture of Ukraine about the anti-competitive practices when supplying the Russian diesel fuels and liquefied gas to Ukraine.

This situation came about through the violation of the international trade rules by the Russian oil producers, because of these initiative subsidies from the budget of the Russian Federation as per the excise duty return scheme during the oil product export, which is a violation of the WTO norms and is a reason for applying the countervailing measures.

As of today, this hinders the fair competition development and puts the future existence of the domestic oil refineries and their investment effectiveness at threat.

The total import share of the Russian oil products at the diesel market had reached 47%, at the liquefied gas market - 55%. At the same time, the supply share of such motor fuel types from other countries (Belarus, Lithuania, Poland) and the domestic supply share had significantly decreased.

For this reason, the Ukrainian producers ask for the government support and initiate the countervailing investigation to apply the countervailing measures concerning the Russian diesel fuel and liquefied gas to Ukraine by imposing the extra duties on subsidized imports at the rate of 8.46%.

The countervailing measure imposition and the state-protected market availability should allow creating the appropriate conditions for further modernization and increase of processing volumes by the domestic producers. It should also enable increasing Ukraine's GDP by increasing the domestic oil production and creating the workplaces, diversify the oil supply sources and reduce the importer impact on Ukraine's local market.

The supply dependence reduction of the Russian oil products will facilitate the fulfilment of the order of the Cabinet of Ministers of Ukraine within the NSDC decision approved by the President Decree 874/2019 as of 02.12.2019, which provides for the measures of oil product supply diversification by July 01, 2020 (from one source more than 30 %).