|Photo: RIA Novosti|
Most oil refineries in Ukraine are owned by Russian companies or are operating on Russian crude oil. Since the beginning of political crisis, refineries have almost stopped producing gasoline and the imports of crude oil have ceased. “If we talk about fuel, we have a stable situation. We estimate that we have enough fuel for 28-29 days”, Prodan told RBK Ukraine. Of course, a situation in which a country receives no crude oil imports and has insignificant stocks of fuel can’t be described as “stable”, but the current Ukrainian “government” is known for its unjustified optimism.
The situation with the natural gas supplies is just as bad. According to Prodan, Ukraine can access 2 bn cubic meters of natural gas from its underground storage facilities. This quantity should be enough for covering between 2.5 and 3 months of consumption. However, after April 1st all of the existing discounts on Russian gas price will be canceled. In the past, Ukraine was unable to pay for natural gas deliveries even at discounted prices so, there is doubt that a crisis-stricken illegitimate government is alble to pay for gas deliveries at full price.
After Ukraine’s debt to Gazprom reached 2 billion dollars, the Russian gas giant warned that the next deliveries will only be made after advance payments. It is highly unlikely that the self-appointed authorities in Kiev will find the funds necessary for the payments. Yuri Prodan’s hopes that “reverse supplies” from the EU can help were dashed by a recent statement made by Slovakian government which stressed that Bratislava will not increase supplies to Ukraine to a level that can be “detrimental” to the Slovakian economy. Robert Fico, the prime minister of Slovakia, told the press that his priority is “to ensure the flow of Russian gas through Ukraine” and pointed out that although supplies from Slovakia can help Ukraine, his government is not in a position to fund such help.
Overall, the situation in Ukraine has not yet become a full-fledged fuel crisis but it is likely to evolve into one. Regardless of the source, imports of crude oil and natural gas will require advance payments in hard currency while the country’s budget is empty. Self-appointed Ukrainian authorities expect help from the US and the EU, but so far no one in the West has come up with a solution and the funding for helping the so-called Ukrainian government. – VOR.
Nothing to see here, move along. While it appears the Russians are willing to pay the price of modest sanctions from the west to ‘liberate’ their fellow countrymen, the fallout from further tension with Ukraine could “boomerang” once again on the divided nation.
As RBC Ukraine reports, the Minister of Energy and Coal Industry Yuriy Prodan said at a press conference today that “oil reserves will last for 28-29 days” in Ukraine. After that, the negotiation begins as Ukraine already owes billions for previously delivered gas – as Ukraine’s storage levels more than halved in the last 3 months.
Via RBC Ukraine,
Stocks of petroleum products in Ukraine will last for 28-29 days, said at today’s press conference, the Minister of Energy and Coal Industry Yuriy Prodan.
“Speaking on the situation with oil, then ensure there is quite stable. Today oil reserves will last for 28-29 days,” – he said, the ” RBC-Ukraine . “
At the same time, the Minister noted the significant risk reduction in the supply and rising gas prices. As of March 25, 2014 in Ukrainian underground gas storage facilities located 7 billion cubic meters of gas.
“Up there can be about 2 billion is not the quantity that scares experts, it would be possible to hold only a week. It all depends on what kind of regime will be whether we can take about 20 million cubic meters. Meters of gas to reverse and so on “- said Prodan.
According to the company “Ukrtransgaz” abnormally warm winter 2013 2014. has reduced gas extraction from underground storage by an average of 37% compared to the same period last year: it was 60 million cubic meters per day.
In late December 2013. occupied at the time the post of Minister of Energy and Coal Industry of Edward Stawicki reported that Ukrainian gas reserves in underground storage is 16.5 billion cubic meters.
We suspect any further military intervention will only crimp this supply even faster. – Zero Hedge.
WATCH: Collapsing Ukraine.