According to an Ukrtatnafta press release, the oil products company is predicting a 20% increase in production at the Kremenchuk refinery for December, bringing the monthly total to 360,000 tons. However, this is still below the plant’s typical monthly average of between 500,000 and 600,000 tons, before the current “management dispute” led to a cessation of crude supplies from Tatneft.
The company’s plan has several refining assets that had been shut-down brought back on-line to account for the increased production figures.
Given the company’s confidence in its ability to boost the production rate, it would suggest that Ukrtatnafta has succeeded in securing future crude supplies, at least for this next month. It had been surviving at a limited production rate through deliveries of Russian crude via Odessa and supplies purchased on Ukraine’s domestic oil market.
These crude supplies are more expensive than what it had been getting from Tatneft via pipeline originating at the oil fields in Tatarstan. One Tatneft executive was quoted as saying that Ukrtatnafta was now paying about $105 per barrel but this may not be a reliable source, as Tatneft has an interest in making the affairs of Ukrtatnafta look as badly out of order as possible.
Analysts said also on Thursday that prices for Kremenchug’s refined products had also risen — $1,095 for a tonne of diesel from $1,059, 92 octane petrol rose to $1,139 per tonne from $1,109 and “super” 95 octane rose to $1,168 from $1,129.
Kremenchuk (Kremenchug is the transliteration in Russian) produces around a third of Ukraine’s refined oil products and represents a vital economic asset as well. Bringing the production figures back up to pre-disruption numbers may also help slow rising gasoline prices in Ukraine, which have now hit the psychological mark of $1 / liter. However, the driving factor for gasoline’s price increase has been spiking prices in the world oil market, rather than problems at Kremenchuk–Ukraine still has one of the cheapest rates for gasoline in Europe.