14:15 27.05.2022

Naftogaz tasked with becoming national operator in oil products market – Vitrenko

4 min read
Naftogaz tasked with becoming national operator in oil products market – Vitrenko

NJSC Naftogaz Ukrainy has been tasked with becoming the so-called national operator in the oil products market in order to ensure fair market prices, Naftogaz Board Chairman Yuriy Vitrenko has said.

"The idea is not that the state wants to monopolize this market. But now a powerful state player should appear in the market, in which there would be complete confidence both from the state and from the people – with the understanding that the prices at these gas stations are fair and honest," he said in an interview with Interfax-Ukraine.

According to him, there is certain mistrust towards private large gas station chains.

"When there is a state player with a significant market share – 15-20-30%, that is, not 100%, but not 1%, then there is more confidence that consumers have the opportunity to buy at a fair competitive price... If the network occupies 30% of the market, this already provides a real alternative to people. In turn, this will force private operators not to raise prices either," Vitrenko explained.

He noted that when competition in the market is not perfect, the emergence of a state player makes it possible to make it a price leader and abandon state price regulation.

"Naftogaz should be the operator of the national network so that there is no question of high prices. This task was set by the president. We can also be an effective tool for the state to cooperate with the world's largest companies in terms of resources," the Naftogaz Board Chairman said.

Vitrenko specified that Naftogaz had not yet gained control over the network of Glusco filling stations. "There are some nuances, but I hope that the state will show a certain will and we will have control over the gas station network," the Naftogaz Board Chairman said.

At the same time, he stressed that the presence of gas stations in the current conditions does not mean the presence of oil products.

Vitrenko added that it is not even a question to find gasoline and diesel abroad. "For example, here in Davos, I held talks with leading companies, and we have the opportunity right now to bring a very large amount of fuel to European ports to cover all the needs of the Ukrainian market. For large companies, the scale of the Ukrainian market is relatively small, they say: There are no questions, we can cover all your needs tomorrow," the head of Naftogaz said.

According to him, the problem is that these large companies can supply fuel to large ports – Amsterdam, Rotterdam, Antwerp or the ports of the Mediterranean, while fuel is needed at the border of Ukraine or in the ports of Poland and Romania with help in logistics from these ports to Ukraine.

"So far, there is no logistics in the required volumes. It is necessary to negotiate with countries such as Poland, Romania, Hungary, Slovakia, so that they expand logistics capabilities in a non-standard way or even sometimes give priority to the logistics of petroleum products in Ukraine. This is not only a matter of business or economics, but also politics," Vitrenko said.

In his opinion, the role of Naftogaz is to solve commercial issues that are more difficult for private businesses, for example, for large international companies, it may be easier in the current conditions to conclude contracts for the supply of large volumes of oil products to a national company or to reserve logical capacities for a long time.

"If the government needs help from Naftogaz in terms of new competencies, then we can try to develop these competencies or acquire them in the market, but this takes time and there can be no guarantees," Vitrenko added.

Answering a question about the network of the national operator, the board chairman of Naftogaz said that they are talking about both gas stations that Naftogaz fully controls, and gas stations of Ukrnafta, in which Naftogaz has a majority share.

"There we have a significant impact and can control that the prices are adequate. When we have our own network, we will have a clear understanding of the cost – not in theory, but in practice. We are also ready to help with logistics, we have enough financial resources, to book any logistics now. The main thing is to show it to us," Vitrenko stressed.

As reported, on May 13, Prime Minister Denys Shmyhal announced a decision of the Cabinet of Ministers to transfer 172 filling stations of Glusco to the management of the state company, NJSC Naftogaz Ukrainy.