The diesel factor: will Ukrainian consumers feel the impact of fuel supply cuts from Hungary and Slovakia?
19 February 09:52
ANALYSIS 
Hungary and Slovakia are suspending diesel fuel supplies to Ukraine. Komersant investigated whether Ukrainian consumers will feel the impact.
The pro-Russian leadership of Hungary and Slovakia has someone to follow. The Russian authorities have stopped gas supplies to Ukraine more than once. And now their sympathizers in Europe are using similar methods. That is how strong their dependence on Russian oil is.
We would like to remind you that the transit of Russian oil through the Druzhba pipeline stopped after a targeted Russian strike on Brody on January 27. At that time, as reported, a critical infrastructure facility belonging to the Naftogaz group was damaged there. The strike caused a fire that took several days to extinguish. Technological processes at the facility were forced to stop. The Ukrainian side warned Hungary and Slovakia about the transit stoppage.
However, both Budapest and Bratislava believe that oil supplies have not yet been restored after the Russian strike on Brody due to a political decision by the Ukrainian leadership. They decided to respond according to the Russian scenario – by stopping supplies. Hungarian Foreign Minister Péter Szijjártó announced that his country would suspend diesel fuel supplies to Ukraine until the Druzhba oil pipeline resumed operations. For his part, Slovak Prime Minister Robert Fico said that Slovakia had declared a state of emergency due to a shortage of petroleum products in the country and, in view of this, would not export them to Ukraine.
There will definitely be no problems with diesel fuel at Ukrainian gas stations. This is the opinion of Sergey Kuyun, director of the A95 consulting group.
“The Hungarian and Slovakian routes are controlled by the Hungarian oil company MOL. This accounts for up to 10% of diesel fuel imports. Accordingly, the volume is small, and we have enough other routes from which we can cover the deficit. We receive most of our fuel—45%—from Romania and Poland. There will be no problems with this. Accordingly, there will be no problems with the price either—it will depend on the global market situation, not on any shortage,” the expert noted.
Slovak Prime Minister Robert Fico also threatened Ukraine with the cessation of electricity supplies if Kyiv does not unblock the transit of Russian oil through the Druzhba pipeline. And this is more complicated. Ukraine has an electricity shortage, and every megawatt counts. Perhaps realizing this, the head of the Slovak government has so far limited himself to threats regarding electricity exports. Daria Orlova, an electricity market analyst at ExPro, continues.
“Currently, Ukraine can import a little more than 400 megawatts from Slovakia during peak periods, which is about 20% of total imports. If Hungary and Slovakia unite, this will amount to more than 50% of electricity imports. So, these are not small volumes. However, I don’t think they can do this because we are connected to the European energy system. But we cannot rule out the possibility that some line may go down due to some unforeseen repairs and supplies may be interrupted because of this. So this scenario is still possible. But then we will have to see how the European Union reacts to it,” the expert noted.
Brussels is already monitoring the situation. European Commission spokeswoman Anna-Kaisa Itkonen said that the EU is in contact with Ukraine regarding the timing of repairs to the Druzhba oil pipeline. The EU executive body is also ready to convene an emergency coordination group with the relevant parties to discuss alternative fuel supply routes.
Author: Serhiy Vasilevich
