13:01 21.02.2020

WOG Ukraine and Continuum Ukraine survived after the death of Ihor Yeremeyev

5 min read

WOG gas stations are Ukraine’s largest and most recognisable gasoline brand. Following the death of Continuum Group of Companies founder, Ihor Yeremeyev in 2015, there were few who did not discuss the issues of possible bankruptcy of the green network of gas stations. The media were keen to comment on West Oil Group's debts to creditors and the company's conflict with the State Fiscal Service (SFS). Players in the oil market rubbed their hands at the thought of problems between the SFS and WOG, thinking they’d be able to pick up the competitor’s assets for a steal. Contrary to the gossip and the rumours, as of early 2020, the company continues to serve about 200 000 thousand customers daily; manage hundreds of gas stations throughout Ukraine; to maintain its development of WOG Market branded stores and WOG Café food outlets.

Owner of the Continuum Group Ukraine (including WOG gas stations) Serhij Lahur and his partner Stepan Ivakhiv have indeed pulled their business empire out of crisis following the tragic death of Yeremeyev and breathed new life into it.

Successful WOG Ukraine Projects

In recent years, the WOG network under Continuum Ukraine leadership:

  1. Continues to enhance the quality control of their fuel;
  2. Maintains development on a network of cafés within their facilities;
  3. Has launched digital services in the PRIDE application.

In August 2019, the Globus Petroleum liquefied gas quality control laboratory (Boryspil) awarded state accreditation for compliance with the requirements of updated standards DSTU ISO / IEC 17025:2017. West Oil Group continues to work with Globus Petroleum to provide customers with fuel that meets all national and international standards. “We want to know that the quality of petroleum products and gas is checked in a laboratory that has the status and competence of the best-known international accredited research stations,” - read a statement from the retailer upon receiving accreditation from Globus Petroleum.

At the end of 2019, two important pieces of news about the development of the WOG Café network appeared:

  1. A trademark establishment in coffee shop format was opened in the new terminal of the Odesa Airport;
  2. The Ukrainian Railway High-Speed Company extended its agreement of the cafe's operation on Intercity and Intercity + trains until the end of January 2020. A similar agreement is expected to be signed shortly for a period of at least a few years to come.

In August 2019, the green cafes received two awards from organisers of the 11th national Private Label-2019 Award for:

  1. Brand recognition;
  2. Project of the year under a private brand.

By the way, a subsidiary of West Oil Group managed to win the Brand Recognition nomination due to the excellent taste of its coffee, as WOG Ukraine ensures that customers of their branded gas stations are provided only the highest quality coffee. To this end, in 2019, the company continued installing interactive premium FRANKE A1000 coffee machines at the brand's gas stations. The first 10 of these machines appeared at stations in Kyiv, Odesa and Lviv. In the first quarter of 2020, the purchase of a new batch of coffee equipment for gas stations in other regions is planned.

WOG mobile application PRIDE continues to be the most progressive among the Ukrainian petroleum product trading market. In 2017, PRIDE users were the first in the country to be able to pay for fuel and coffee without going to the cash register – a revolution in the gas market of Ukraine! In December 2019, a major update of the program took place and now B2B clients who fuel up using fuel cards can now do so using non-cash payments. Along with other users, they also have the ability to pay for fuel without leaving their car thanks to the WOG Pay service.

The conflict between WOG Ukraine and the SFS: How it all began and how it ended

The confrontation between the SFS , WOG Ukraine and the Continuum Group Ukraine began three years ago. Based on a review of reports for the period from 2011 to 2015, the Office of Large Taxpayers of the SFS issued a fine of 417 million UAH for evasion of excise duties by the WOG gas station network. The press went on to hypothesis that arrest of the WOG accounts might even be possible. Co-owner of Continuum Lahur, in turn, filed a lawsuit with a request to cancel the order set by the tax authorities.

The events unfolded as such:

- the court of jurisdiction took into account the arguments of the plaintiff regarding the impeccable tax history of the Continuum Group of Companies: since its founding in 1992, Continuum has passed all inspections on time and increased contributions to the state budget in proportion to business development;

- the Court of Appeal also sided with Continuum;

- the case came to the Supreme Court, which, in 2018, partially satisfied the cassation of the SFS and decided to start new hearings.

Nevertheless, while trials in the case were ongoing, the gas station network successfully (without any violations) passed three more tax audits from 2016 to 2019. In addition, WOG beneficiary Lahur managed to repel another fiscal attack. In October 2019, the Supreme Court refused to satisfy the cassation appeal of the Main Directorate of the SFS in the Volyn Region and cancelled a fine of 41.5 million UAH. The above organisation was looking to charge WOG for a contrived violation on terms of payment in the field of foreign economic activity.

Quoting bankruptcy of the WOG gas station network based on claims from the tax authorities is a classic form of information manipulation. Confrontation between the SFS and the WOG group of companies has more to do with contrived information than what is true, and has done little to prevent the green brand from developing its business, introducing new client services, collecting prestigious awards, and looking confidently into the future.