Amid shrinking fuel supply channels and escalating Russian strikes on fuel infrastructure, Ukraine needs to build decentralized, small underground petroleum product storage facilities, according to Serhiy Kuyun, director of the consulting firm A-95.
"There’s only one way out - storage in underground facilities. Both the state and private players are apparently already working on this. At the same time, building this kind of infrastructure costs at least twice as much as above-ground tanks," he wrote on Facebook on Wednesday.
According to the expert, there is currently no state support even at the level of streamlining and speeding up approval of project documentation, let alone preferential lending and other incentives.
Kuyun said the goal in building underground storage should not be large facilities, since these are more vulnerable to complex missile strikes.
"But if every importer builds its own small storage facilities of 3,000-4,000-5,000-10,000 cubic meters, that would already be a much more resilient setup. In any case, it should be understood that this won’t happen quickly - a year and a half to two years, if started today," he said.
The expert said the need to build fuel reserves should be communicated to citizens, municipal institutions and state organizations, as well as private companies. "A dispersed reserve among consumers will help prevent panic buying and excessive instantaneous strain on the supply system in the event of a crisis," the A-95 director said.
According to Kuyun, Russia has carried out new strikes on the bridge in Mayaky (on the route from Reni to the mainland) and a jet-powered Shahed strike on an oil tanker truck on the same route.
"I think that when planning fuel supply strategy for the coming months, it’s better to write off the South (...). This means the entire burden will fall on the land border, which is already maximally overloaded. All this points to the system becoming less diversified, with the corresponding risks," Kuyun wrote.
He explained that the enemy is gradually cutting off Ukraine’s southern fuel supply route, dealing a triple blow: fewer supply channels, reduced consumption as "sea" exports shift to "wheels," and increased strain with reduced border throughput capacity for fuel imports.
At the same time, Russia is now attacking not only oil depots in Ukraine but also gas stations with fuel trucks.
As previously reported, the Oil and Gas Association of Ukraine (NAU) is petitioning the government to give the fuel industry access to loans at 10%, which could be achieved by extending Cabinet of Ministers Resolution No. 594 to all types of business, in order to build underground petroleum product storage tanks as part of the reconstruction of existing oil depots.
NAU president Yaroslav Starovoitenko said this at an online meeting with business organized by the parliamentary Committee on Finance, Tax and Customs Policy earlier this week.
