For the past three weeks Ukraine has found itself in the midst of an acute fuel shortage. All but a handful of pumps nationwide are closed to the public
. The only significant local producer, the Kremenchuk oil refinery, was taken offline in April after a series of rocket attacks. Russian rockets have also destroyed a dozen fuel-storage facilities and damaged railways, sometimes restricting what can be carried that way. Meanwhile, the fuel needs of military and emergency vehicles are ratcheting up demand. The same is true of agriculture, now in the middle of sowing season. Ukraine needs about 540,000 tonnes of petrol products a month.
Industry insiders are wary of making public statements that are critical of the government’s handling of the crisis; that is not the done thing in wartime. But in private they complain that officials were not quick enough to react to shortages; they even exacerbated them, they argue. A senior manager at a big private fuel company says that price regulation has meant that suppliers are asked to sell petrol for less than it costs to supply it.
The government at first tried to defend its position, with ministers resorting to punchy rhetoric. On May 14th the economy minister, Yulia Sviridenko, decried a handful of suppliers who had openly flouted price controls—they were “pillagers” during wartime, she said. But just four days later, the cabinet backtracked, and acknowledged a need to “temporarily” suspend the controls, to allow retailers to regulate demand.
The price rise will have an immediate impact on consumption in a nation where disposable income is severely curtailed. But it is unlikely on its own to end the fuel crisis. Ukraine does not have the rail infrastructure needed to deliver enough petrol from new markets in Europe, which works on a different gauge. It does have enough modern lorries to switch completely to road transport.
Oleksandr Kubrakov, the minister for infrastructure, says that solving the crisis will require a significant readjustment not only within Ukraine’s fuel markets, but in Europe too. It was a “complicated” process that would take “several weeks if not months” to complete. The raw data of the government’s response were remarkable, he insisted. But progress was always going to be “fragile”, and only as good as Russian rockets allowed it to be.
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