Energy Headlines

Oil traders plan to create a special institution to monitor the quality of oil products. This subject was discussed during the round table Pricing and Quality Control Policy on the Petroleum Products Market of Ukraine organized by the European Business Association. Currently, only Derzhspozhyvstandart (the State Consumer Standard body) is authorized to control the quality of fuel sold at gas stations. However, due to the lack of funds for financing lab testing, last year the body did not inspect a single gas station.

The idea of inspecting the quality of gas as an additional measure to state control is nothing new. In 2007 Yuriy Boiko, who served as Minister of Fuel and Energy in Yanukovych’s government, mentioned the need for such a measure. Upon being reappointed to this post, Boiko stated his intention of finalizing this matter at a meeting of the Council on the Functionality of the Oil and Petroleum Products Market.

"Almost a third of all gas stations will be shut down if the Derzhspozhyvstandart would conduct an inspection of documents at gas stations," said Serhiy Kuyun, Director of the A-95 Consulting Group. "At present, according to our information only half of all gas sold on the Ukrainian market corresponds to the Euro-2 standard. Oil products with specifications below the defined standard make up 30% of the remaining half and another 20% is simply falsified," he added. Large retailers are willing to conduct lab testing at their expense as soon as it will be sanctioned by legislation. "We are eager to finance testing of gas in labs on a level with other members of the Association of Oil Product Market Operators of Ukraine," said General Director of Shell Retail Ukraine William Kozyk.

Clearly, with the help of such an instrument major oil traders will force smaller companies that sell low-grade gas from out of the market. From consumers’ point of view it could even do good, though.

Source: ProUA