Ukraine turns to EU as Russian invasion cuts off regular fuel supplies

Ukraine has been forced to seek alternative fuel supplies as the Russian invasion hits its traditional supply routes, leaving the war-torn country with acute petrol shortages.

A Russian naval blockade has prevented imports from Azerbaijan and Romania via the Black Sea, while Belarus, previously a major supplier, is no longer delivering fuel after its president Alexander Lukashenko let his Russian counterpart Vladimir Putin use his country as a base to attack Kyiv.

Oleksandr Kubrakov, Ukraine’s infrastructure minister, said the war-torn country was now getting fuel “anywhere we can get it”.

“All of our imports are from the EU,” he told the Financial Times in an interview. “We only used to use the nearest countries and ports to Ukraine in Poland and Romania, now we are importing it from Belgium, the Netherlands.”

As many as 230 fuel trucks are now crossing into Ukraine daily, while new agreements with the EU and Poland are aimed at simplifying customs and border control procedures which have left trucks lined up for miles.

Air strikes in April destroyed Ukraine’s only major oil refinery in Kremenchuk in central Ukraine which accounted for about 40 per cent of total petrol and diesel supplies, as well as several fuel depots across the country as part of a Russian attempt to hit Ukrainian army supply routes.

The fuel shortages have shut down petrol stations across the country and threaten to leave drivers stranded.

Filling up requires waiting in line for hours or navigating the card system petrol stations have introduced to ration fuel at fixed prices.

Some Ukrainians are turning to a thriving online black market run by OLX, the Ukrainian equivalent of Craigslist, and featuring hundreds of classified advertisements selling ration cards, petrol canisters or even used water bottles filled with fuel.

Before the war, Ukraine only imported 5 per cent of its fuel through its borders with Poland, Hungary, Slovakia, Romania, according to Rostyslav Shurma, deputy head of president Volodymyr Zelenskyy’s office. Now the figure is 100 per cent. Kyiv has already increased capacity at its EU borders tenfold, he said, and wants to double that further still.

Ukraine’s government initially defended price controls, which it said prevented wartime profiteering, but then abandoned regulating fuel prices in May after some sellers complained the measures left them running losses at their petrol stations.

Alexander Kats, who owns a chain of petrol stations in central Ukraine, is struggling to find enough fuel to keep them going. “The situation is crazy. Just crazy,” he said.

A few days into Russia’s invasion of Ukraine in February, Kats had watched helplessly as an air strike hit a fuel depot he owns just south of Kyiv. With emergency services overwhelmed, the blaze raged for several days, burning about 10,000 tonnes of fuel and sending thick clouds of black smoke billowing into the sky.

The rush to import more fuel from Europe has already alleviated some of the shortages after a peak in May. Serhiy Kuyun, head of energy consultancy A-95, said the number of diesel fuel suppliers has more than doubled in the last month, though propane-butane and petrol supplies are growing more slowly.

In June, Ukraine is set to import as much as 600,000 tonnes of fuel from Europe — a tenfold increase over the 60,000 tonnes it imported in March.

As supply increases, Ukraine has relaxed restrictions on fuel purchases from 10 to 20 litres per person. Kubrakov said he hoped the situation would stabilise by the autumn once Kyiv signs more long-term contracts with foreign suppliers.

The global effort to help Ukraine export its grain after Russia cut off its main Black Sea supply routes is also helping the country import more fuel, he added, because the trains and trucks carrying fuel use the same routes.

European banks, however, are reluctant to finance any deals to supply more fuel because of the risks from the war, according to Kuyun.

Ukraine’s neighbours are also unable to meet the surge in demand. To combat the rise in regional wholesale prices, Hungary limited sales of discounted fuel to local residents last month.

The high demand is likely to remain as long as Ukraine needs to keep fuelling its war effort, Katz said. “The tanks, artillery, trucks and logistics all need to be brought in,” he said. “And you need to be able to fill it up. There’s only so much you can do in a day.”