Excess supply lowered autogas prices

Due to low demand on the Ukrainian market, wholesale prices for autogas from the beginning of the year decreased by 1750 UAH/t (8%). It is reported by Enkorr with reference to the A-95 Consulting Group.

By December 16, 2019, the prices of domestic auctions fell to 16,000 UAH/t, which is 10% lower than last year.

Previously, Ukrgazvydobuvannya sold the resource at a weighted average price of 16 075 UAH/t: individual transactions were concluded at 15 700 UAH/t. Poltava Oil and Gas Company sold gas for 16 500 UAH/t.

The reason for the decline was the cheapening of the resource on the Belarusian-Polish and eastern Ukrainian borders.

Also, one of the reasons was the glut of the Ukrainian market. Due to fears of an increase in excise duty, in December, traders increased import supplies of gas (excluding butane for Karpatneftekhim) by 6%, to 129 thousand tons, compared to November.

For 12 days of January, 42 thousand tons of the product were processed: from the Russian Federation – 24 thousand tons, Belarus – 10 thousand tons, Kazakhstan – 8 thousand tons. Compared to December, in January, the average daily supply decreased by 11%, to 3.5 thousand tons/day. But the market still has an oversupply of resources, which has caused a collapse in prices.

To recap, on January 13, the Committee on Tax and Customs Policy of the Verkhovna Rada of Ukraine did not vote for raising the excise tax on liquefied petroleum gas. On January 16, the Verkhovna Rada amended the tax code without revising the excise tax on gasoline and liquefied petroleum gas.

It was previously reported that Ukraine had increased its critical dependence on LPG imports in 2019.

Tags: The Cabinet of Ministers, gas, contracts, hydrocarbon production, tariffs, legislation, EU, Ukrgazvydobuvannya, gas transit, RF, LPG, foreign affairs, Gas market, The Verkhovna Rada, investments, gasoline

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