PJSC "Ukrnafta" informs that on February 16, 2021 the company sold 166,982 tons of oil at the starting price of UAH 11,176.80 (including VAT) per ton at the exchange-based auction (No. 267 NGK-UEB). At the same time, the selling price was lower than the quoted price for Urals oil on the European markets, the difference being approximately UAH 2606 per ton (including VAT). The difference is explained by the fact that the starting prices were set by the state auction committee according to the customs value of oil that entered the territory of Ukraine in the period preceding the auction.
Ukrnafta notes that the starting price is set by the state auction committee in accordance with the provisions of the Cabinet of Ministers’ Resolution No. 570 "On organizing and holding exchange auctions for the sale of crude oil, gas condensate of own production and liquefied gas" based on the data available from the State Customs Service.
Ukrnafta already faced a similar situation in June 2020. The company will repurchase oil at its sale price for the purpose of its further processing into petroleum products at the Kremenchuk refinery. Thus, the selling price will not have a direct impact on the financial results of the company. Ukrnafta PJSC will sell the refined oil products through its own network of petrol stations, which will have a stabilizing effect on the oil products market at a time of rapid growth in oil and oil product prices.
The Supervisory Board of PJSC Ukrnafta is aware of the situation with the sale of raw materials at the exchange auctions. The Supervisory Board tries to contribute to the solution of these problems within its competence.
"The issue of Ukrnafta's raw material sales is the subject of constant attention of the Supervisory Board. Ukrnafta already faced a situation where starting prices were below market prices last summer. This problem is a consequence of imperfect regulation by the government, and the Supervisory Board supports the company's appeal to the government to find appropriate solutions," said Mykola Havrylenko, Chairman of the Ukrnafta Supervisory Board.
Ukrnafta has repeatedly asked the government to review the current approach to pricing, as the mechanism for determining starting prices limits the range of customers and the company's ability to effectively sell its own products. The latest appeal was sent in December 2020 to Yuriy Vitrenko, Acting Minister of Energy of Ukraine.