Motorists seek an alternative to gasoline

Photo: Konstantin Melnitskiy

The falling demand for oil products has hit a record low. In August, 217,400 t of gasoline was sold, down 24.6% from August 2013, the State Statistics Service reported. This is the lowest indicator in the past decade. Sales of diesel fuel dropped 12% to 156,600 t. Overall, sales of petroleum products dropped 8.97% to 2.9 mn t over the period January-August. “In Q1 we registered high indicators that contributed to the general statistics,” explains General Director of the A-95 Consulting Company Serhiy Kuyun.

Galloping prices

Combat actions in the east of the country dealt a serious blow to sales in August, believes Oleksandr Syrenko, an analyst at UPECO. “The demand for gas dropped in our chain by 30% over eight months,” General Director of Parallel, which manages namesake gas stations located primarily in the east of Ukraine, Olena Khyliyenko told Capital. In addition, the buyers were scared away by the galloping prices of fuel, she says. The average price of A-95 gasoline increased over August by UAH 1.70 (10.97%) to UAH 17, according to A-95.

Motorists have started to convert to alternative types of fuel. “In the period of high prices of gas and diesel fuel, some drivers will traditionally convert to compressed natural gas,” agrees Vice President of the OKKO chain Oleksandr Hehedysh. The main reason for this is the lower price of natural gas. If a car consumes 10 liters of gasoline per 100 km, natural gas consumption will be 11 l per 100 km. Meanwhile, 10 l of gasoline cost UAH 170, while 11 l of gas – only UAH 99. “I had to wait for a week to have my car converted to running on liquefied gas,” tells Kuyun.

Gas stations closing shop

The armed clashes in the Donbas region also led to reduction in the number of gas stations. The SSS has not yet provided the data for eight months, but in January-July around 430 gas stations were closed down in the Donetsk and Luhansk oblasts. For instance, Parallel shut down 72 gas stations, while only 10 of 35 OKKO gas stations are in full operation, according to the press service of the Halnaftogaz concern. In fact, gas stations are closing shop in the Poltava oblast (minus 14) and Volyn (minus 15). “Drivers are switching to discount gas stations. According to my information, BRSM and gas stations owned by Privat (UkrNafta, ANP, AVIAS plus, Sentosa Oil and other) have been impacted the least by the declining demand, while some chains even registered an increase compared with last year,” says Kuyun. Syrenko believes that this year major players on the gas market have revised their development plans.

As Capital wrote earlier, a 25% decline in fuel consumption based on the results of the year is expected compared to 2013. Over the past year, the retail chains sold 4.89 mn t of fuel (not taking into account Crimea and Sevastopol).