Ukraine to Ramp-up Diesel Output, Boost Imports to Avoid Shortages

Ukraine plans to increase diesel imports via its sea ports, ramp up domestic production and buy more diesel from Poland and Lithuania, the energy ministry said, outlining measures to avoid any shortages in supplies from Belarus and Russia in May.

Five trading sources told Reuters on Monday that Ukraine could face diesel shortages next month because of planned maintenance at the Belarus Mozyr refinery, coinciding with a break in supply from Russia’s Rosneft.

“There are delays in signing new supply contracts and diesel shipments to Ukraine,” the energy ministry told Reuters.

“Upcoming maintenance at Belarus Naftan and Mozyr refineries has a negative impact on the timely supply of motor fuel to the domestic market,” the ministry said.

Ukraine may compensate for a fall in supplies by increasing output at its Kremenchug refinery, using stored oil products and increasing imports via its sea ports and from neighbouring Poland and Lithuania, the ministry said.

Russia’s Rosneft may resume diesel supplies to Ukraine once trading firm Coral Energy replaces Proton Energy Group SA, which was previously Rosneft’s exclusive supplier of diesel to Ukraine, the ministry said.

Coral Energy was expected to supply about 120,000 tonnes of diesel monthly starting in April. Supplies have yet to start.

Proton Energy suspended shipments of Russian diesel to Ukraine in April after a ruling by Kiev’s Supreme Anti-Corruption Court led to the seizure of diesel, owned by the Swiss-based trader, that was in the pipeline from Russia.

All diesel supplied by pipeline has been halted since then.

The pipeline is now operated by Ukrainian operator Ukrtransnafta. The company said on Monday it planned to resume shipments of diesel via the route.