Coronavirus has generated a lot of illegal filling station. What will happen to the market?

Coronavirus has generated a lot of illegal filling station. What will happen to the market?

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The informal segment of the retail market of petroleum products massively restores positions in key regions on the background of favorable price situation and the distraction of public authorities to fight the spread of the coronavirus. This article “the End of poverty” says the analyst of “Consulting group A-95” Artem Kuyun.

“Intensification of the black market was to be expected. The forces of the state aimed at combating the spread of COVID-19, militiamen now, of course, not to the violators in the fuel market,” writes the author.

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Favorably for the shadow segment is formed and the price situation on the market when the spot price at the moment has fallen twice in comparison with level term contracts that are network companies.

“The average cost of the resource in the opt, 20 March to 8 April, dipped by about 3 UAH/l, and in retail – 0.65 UAH. Large network, working on term contracts are still sold out March, a resource purchased for $250/ton (the average value of the quotations in March), while illegal aliens are working “on wheels” have access to the spot online for $110-120 in the opt,” – said the author.

Moreover, because of quarantine measures and the collapse of the implementation, the specific implementation costs of a liter of fuel at network stations has increased on average by 1 UAH/l

“To “trashy,” same gas station, the situation is reversed: in the period when the population with the most saves, sales are growing because of the potential to trade much cheaper, and therefore, it allows trading even cheaper,” – says the author.

An additional incentive for the resumption of the illegal filling station/AGFCS was the increase of business demand for cash, which such objects generate successfully.

Complicate the implementation of the unaccounted-for fuel was intended to reform, involving the reconciliation of remaining fuel in excise warehouses with the data of the electronic administration system, but its launch, including due to quarantine, has been delayed for three months.

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We will remind, at the end of December 2019, after the orders of the President and the Prime Minister, law enforcement and the SFS authorities stepped up the fight against illegal filling station. Two weeks later, the government reported that the audits discontinued operation 620 illegal objects. In the future the authorities have promised not to stop measures to clean the retail fuel market from illegal filling station and announced a campaign against illegal mini-refineries.

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