Strikes by Polish carriers significantly shook the Ukrainian market, forcing traders to recall the heady season of 2022, when the country lost 100% of its fuel supply sources. Autogas traders find themselves in the most difficult situation.
Polish carriers blocked the three largest checkpoints: Dorogusk-Yagodin, Korcheva-Krakovets and Khrebinnoye-Rava-Russkaya.. The main requirement is the abolition of the transport “visa-free” visa, which Ukraine received from the European Union in 2022. The strikers believe that Ukrainian carriers are providing them with unfair competition, taking over part of the cargo flow.. The strike was agreed upon by the Polish government.
Problems arose not only with leaving Poland, but also with entering Ukraine. “If gas carriers managed to get through from Rava-Russkaya, then everything is fine at Yagodina,” one of the traders commented on the situation.
Last week, the Ministry of Development of Communities, Territories and Infrastructure of Ukraine reported that there are more than 20 thousand people on the border on both sides. Vehicle. Ukrainian border guards said that in Krakowka and Ravi-Russkaya their Polish colleagues allowed through a maximum of two cars per hour.
It should be noted that tension at the borders began to rise back in October, when the volume of agricultural exports increased sharply. The eCherga system recorded a queue in all directions of 9–14 days, whereas in the summer it was 3–4 days.
Complications at the Polish border hit liquefied gas the hardest. The reason is that more than 30% of imports or 20% of the entire market for this fuel enters Ukraine through the Polish section of the border.
Some imbalance began to be observed back in October, when changes to the Customs Code came into force. In particular, strict documentary control over the origin of the resource was introduced. From October 17, the importer must provide customs with a package of documents covering the entire supply chain of the resource, starting from the manufacturer. Despite the changes announced in advance, not all fuel companies were ready for the new bureaucratic rules, which led to an increase in the time for customs clearance of the resource, and in some cases even refusal of customs clearance with subsequent shortages, which affected prices.
So, starting in October, gas imports from Poland and the Baltic countries began to decline. On average, over the nine months of 2023, 52.7 thousand were delivered in these areas. tons of LPG per month, and in October already 35.3 thousand. tons. The strikes further dried up this direction: from November 6 to 12, gas imports in this direction decreased by 55% to 4.7 thousand. tons compared to a week earlier.
The failure of imports led to shortages and increased demand for domestic gas. Since the beginning of November, the average cost of LPG at the Ukrainian Energy Exchange auction has increased for some lots to 64 thousand. UAH/ton, or more than 30% compared to the beginning of October.
The problem also lies in the limited number of gas carriers, of which there are significantly fewer fuel tankers. According to market participants, if previously a gas carrier made four trips abroad per month, now it makes one. Accordingly, proportionally less fuel can be delivered.
“We don’t have time to deliver the required volume, so our gas stations are forced to stand idle without resources,” said one of the fuel companies. In mid-November, the lack of autogas at gas stations was recorded not only in small, but even in national gas stations.
Search for alternatives
Problems at the event pushed the market south. As expected, this direction turned out to be not very ready for this. “Currently in Romania, gas is sold out a month in advance,” one of the importers commented on the situation. In addition, gas carriers also have to wait for Ukrainian-Romanian checkpoints: according to the eCherga service, as of November 17, the queue was ten days.
The blockade of road transport automatically led to an increase in demand for rail supplies. Those who focused on the railway before found themselves in an extremely advantageous situation in this situation, because purchase prices for gas increased insignificantly, and on the domestic market they soared to unprecedented heights. According to market participants, the volume of contracted railway gas shipments increased from 20 to 35 thousand. T.
In a big circle
In anticipation of the announced strikes, importers of light petroleum products were also noticeably nervous, but quickly stabilized the situation. Primarily because, unlike gas, the relative indicators of automobile imports of gasoline and diesel fuel across the Polish border in 2023 will not exceed 10%.
Yes, the gasoline market has not experienced any significant problems at all. Only a few players who bet on automotive supplies encountered them.. “We are trying to transfer part of the product to the railway, but gasoline from the north of Poland has to be transported in a large circle through Slovakia and Romania,” said a source at UPG, which is the largest automobile importer of gasoline.
At the beginning, diesel suppliers looked somewhat tense, but it quickly passed. A large vehicle fleet and diversified supply channels have done their job. In addition, the decline in European quotations played into the hands of the Ukrainian market.. This allowed us to go through a short period of turbulence without price jumps, and then move on to a decline. In mid-November, the market was already in its usual surplus status. It is characteristic that this is despite problems with the Poles, as well as the actual closure of supplies from Moldova and Bulgaria.
The logical way out of the situation was a reorientation to railway transport. According to enkorr, diesel deliveries by rail increased by 37% in October.
Can't reach an agreement yet
Now the Ukrainian government is trying to resolve the situation, but is not achieving results. “We are trying to find compromises in order to increase capacity and implement already concluded memorandums, but it is difficult. They proposed to the Polish authorities to launch lanes for empty trucks at the Ugrinov-Dolgobyczow and Grushev-Budomerz private enterprises. We are waiting for an answer again,” said Deputy Minister of Development of Communities, Territories and Infrastructure of Ukraine Sergei Derkach.
It is known that one of the proposals of the Ukrainian side was the unimpeded movement of fuel carriers, because they work exclusively to meet the internal needs of Ukraine and even theoretically cannot compete with Polish carriers. But she was rejected, like the rest of the proposals.
For now, Ukrainian officials believe that the only way to unblock the border is for Warsaw to cancel the permit to hold a strike. The situation is aggravated by power turbulence, since the old Polish government has already left and a new one has not yet been formed.
Meanwhile, the Ukrainian market does not stand still. More and more importers are changing routes from Poland to Slovakia and Romania. The situation is favorable because extremely high logistics costs are covered by lower purchasing prices.
Moreover, there are all the prerequisites for reducing prices at gas stations for both gasoline and diesel fuel. This process has already begun; some networks have reduced gasoline prices by 1–2 UAH/l.
But the cooling of overheated prices for liquefied gas will have to wait longer. Within one to two weeks, the deficit may decrease, after which prices should theoretically go down. And if at some stations the cost has already reached 36 UAH/l, the normal level should be about 27 UAH/l, which corresponds to 50% of the price of gasoline.
Slovakia can support Poland
The Ukrainian fuel market has also experienced worse situations, such as in the spring of 2022, when 100% of supply sources were lost. As we can see, the market has retained its flexibility even now. But it seems that the exam will still continue.
On November 16, Slovak carriers declared solidarity with Polish colleagues and dissatisfaction with Ukrainian colleagues. An hour-long warning strike was held, which could develop into an analogue of the Polish protest. Transport workers have already sent a corresponding request to the authorities.
Meanwhile, Romanians and Moldovans are taking advantage of the situation and are announcing a revival of transport, in particular by rail.