Ukraine is turning to the EU as the Russian invasion disrupts regular fuel supplies

Ukraine is forced to look for alternative fuel supplies as the Russian invasion hits its traditional supply routes, leaving the war-torn country with a severe shortage of gasoline.

Russia’s naval blockade has prevented imports from Azerbaijan and Romania across the Black Sea, while Belarus, once a major supplier, no longer supplies fuel after President Alexander Lukashenko allowed Russian counterpart Vladimir Putin to use his country as a base to attack Kyiv.

Alexander Kubrakov, Ukraine’s infrastructure minister, said the war-torn country was now receiving fuel “from where we can get it”.

“All our imports are from the EU,” he told the Financial Times. “We used to use only the closest countries and ports to Ukraine in Poland and Romania, now we import it from Belgium, the Netherlands.”

Up to 230 fuel trucks now cross into Ukraine every day, while new agreements with the EU and Poland aim to simplify customs and border control procedures that leave trucks lined up for miles.

Air strikes in April destroyed Ukraine’s only major oil refinery in Kremenchuk in central Ukraine, which accounted for about 40 percent of total gasoline and diesel supplies, as well as several fuel depots across the country as part of Russia’s attempt to hit supply routes. the Ukrainian army.

Lack of fuel has shut down petrol stations across the country and threatens to leave drivers at a dead end.

Charging requires hours of waiting in line or navigating the card system. Gas stations have introduced a ration of fuel at fixed prices.

Some Ukrainians are turning to a thriving online black market run by OLX, the Ukrainian equivalent of Craigslist, and including hundreds of classified ads selling ration cards, gas cans or even used fuel bottles.

Before the war, Ukraine imported only 5 percent of its fuel through its borders with Poland, Hungary, Slovakia and Romania, according to Rostislav Shurma, Deputy Head of the Office of President Vladimir Zelensky. Now the figure is 100 percent. Kyiv has already increased its border capacity with the EU tenfold, he said, and wants to double it even more.

The Ukrainian government initially defended price controls, which it said prevented profits during the war, but then abandoned regulation of fuel prices in May after some vendors complained that their measures had led to losses at their gas stations.

Alexander Katz, who owns a chain of gas stations in central Ukraine, is struggling to find enough fuel to maintain them. “The situation is crazy. Just crazy, “he said.

A few days after the Russian invasion of Ukraine in February, Katz helplessly watched an air strike hit a fuel depot he owned, just south of Kyiv. In overloaded emergency services, the fire raged for several days, burning about 10,000 tons of fuel and sending thick clouds of black smoke rising into the sky.

The rapid import of more fuel from Europe has already alleviated some of the shortages since the peak in May. Sergei Kuyun, head of energy consulting firm A-95, said the number of diesel suppliers had more than doubled in the past month, although supplies of LPG and gasoline were growing more slowly.

In June, Ukraine is due to import as much as 600,000 tonnes of fuel from Europe, a tenfold increase from the 60,000 tonnes it imported in March.

As supply increases, Ukraine has eased restrictions on the purchase of fuel from 10 to 20 liters per person. Kubrakov said he hopes the situation will stabilize by the fall, after Kyiv signs longer-term contracts with foreign suppliers.

Global efforts to help Ukraine export grain after Russia cut off major supply routes to the Black Sea are also helping the country import more fuel, he added, as trains and fuel trucks use the same routes.

However, European banks are reluctant to finance any more fuel deals because of the risks of war, Kuyun said.

Ukraine’s neighbors are also unable to respond to the surge in demand. To combat rising regional wholesale prices, Hungary cut fuel sales at a discount to locals last month.

High demand is likely to remain as long as Ukraine must continue to fuel its military efforts, Katz said. “Tanks, artillery, trucks and logistics need to be brought in,” he said. “And you have to be able to fill it. There’s only so much you can do in one day. “

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