Petrol prices may go up by 1.5 times after Kremenchuk oil refinery ceases operation / Photo from UNIAN
Petrol prices may go up by 1.5 times to UAH 35 [about $1.65 at the current forex rate] per liter if PJSC Ukrtatnafta's Kremenchuk oil refinery ceases operation after state-run company Ukrtransnafta's suspension of crude oil supplies to the refinery, according to Deputy Chairman of Ukrtatnafta's board Serhiy Kosheliuk.
"Maybe, we're a burr in the saddle of someone in the market. As today's slogan is "High Quality Cannot Be Cheap" – this is fuel importers' slogan. There is a struggle to make us stop and completely switch to imports. Then petrol at filling stations will cost more than UAH 35 per liter. Someone wants to earn on this," Kosheliuk said.
He also pointed out to a political component in the situation around the halt to crude oil supplies.
"Yes, it's a struggle, and they want us to stop so that to switch to imports. Nowadays, locally produced petrol accounts for about 20%, while the share of imports is 80%. Thus, there is a political component there," he said.
More than 300 Ukrtatnafta employees staged a rally outside Ukrtransnafta's branch in Kremenchuk on August 1, demanding the resumption of crude oil supplies to the refinery.
Refinery workers also picketed an Ukrtransnafta pumping station on the outskirts of Kremenchuk.
Chairman of the refinery's trade union committee Vasyl Khomenko said that Ukrtransnafta explained the halt to the crude oil supplies by a pipeline accident; yet, Ukrtatnafta's representatives visited the accident site and did not find any damage.
"The refinery will close if crude oil shipments stop. About 5,000 workers will lose a job. We demand the resumption of crude oil supplies," Khomenko said.
Head of Ukrtransnafta's Kremenchuk branch Vitaliy Velychko told UNIAN that there was an accident at the 142nd kilometer of the pipeline at 11:00 local time on July 31.
"The pipeline is worn-out. We plan to replace it on August 4. We suggest that crude oil be delivered to Ukrtatnafta by another pipeline, but it needs to be cleared of water that is now in it. Whether to do it or not is being decided now," Velychko said.
On July 31, Ukraine's largest oil producer Ukrnafta announced it might stop producing oil and gas after Ukrtransnafta had suspended oil transportation without giving any reason and despite prepayment for the transportation services.
Later, Ukraine's only operating oil refinery in Kremenchuk, operated by Ukrtatnafta, announced it might cease work because of Ukrtransnafta's failure to deliver crude oil.
UNIAN's reference. Ukrtransnafta is the operator of Ukraine's oil transportation system, which includes 18 pipelines with a total length of 4,569 km, 51 oil pumping stations, 11 tank farms with a total capacity of 1.01 million cubic meters. The pumping stations operate 176 pumping units with a total capacity of electric motors being 356.9 GW. Its 100% stake is managed by NJSC Naftogaz of Ukraine.
Ukrtatnafta was founded in 1994 on the basis of Kremenchuk oil refinery under orders of the presidents of Ukraine and Tatarstan. Naftogaz owns a 43.05% stake in Ukrtatnafta, another 28% is controlled by the structures of the Privat Group and businessman Oleksandr Yaroslavsky. The refinery's designed processing capacity is 18.6 million tonnes of crude oil per year.
In January-June 2015, Ukrtatnafta's net profit grew by 2.2 times, to UAH 1.026 billion from UAH 461 million.