OREANDA-NEWS. August 16, 2010. Only at the end of the last year the Government of Moldova decided to change some “game rules” at the market of oil-products. The first change, quite expected, – the increase of excises for import of oil-products, the importers accepted as their due: all the same, the excise costs will be paid by the consumers.

But the second surgical strike – the proposal of the Ministry of Finance to abolish the scheme of tickets issuance when selling the oil-products at the internal market – caused many discussions. Let us recall, the essence of this initiative is to forbid the use of tickets for fuels and lubricants and to sell the oil-products at the filling stations on the basis of prices indicated on the panel exclusively. It was suggested to consider the other schemes for bonuses and discounts that the filling stations traditionally give to the large clients or within the special promotion action.

However, half a year later, all above-mentioned plans on monetization and liberalization of the market of oil-products still remained on the level of initiative. As the Ministry of Finance explained to InfoMarket agency, it is still unknown when and how the new mechanism will be implemented. “The substitution for operating mechanism must be elaborated taking into account the opinions of market’s participants, therefore the Ministry of Finance is to hold the corresponding consultations, to approve the new mechanism in the Government, to create the corresponding infrastructure and only then to launch it. It’s not so quick process,” – the Ministry of Finance noted.

Until then the prices are determined, as before, following the results of sellers’ bids with large purchasers for volume and way of calculation for purchase of oil-products. And the prices at the filling stations, as before, - are practically the same and change on the panel practically in step.

What changes took place at the market since the beginning of 2010? The growth of prices and decrease of import volumes – these are the main results of January-June 2010 at the oil-products market, published in six-month report of the National Agency for Energy Regulation (ANRE).

According to the ANRE, the growth of prices at the internal oil-products market was caused by the range of exclusively internal factors. The increase since the beginning of this year of the rate of excise duties for oil-products import by 50% (from 1800 leis up to 2700 leis per 1 ton of petrol and from 750 leis up to 1125 leis per ton of diesel oil) provoked the growth of prices for petrol – by 9,1%, for diesel oil – by 4%. The second essential factor – the devaluation of the national currency in January-June 2010 (12,62 leis to USD1) by 15,7% against the same period of 2009 (10,91 leis to USD1) – caused the growth of prices by 13% more.

All internal factors superimposed on external ones – the oil and oil products prices at the world markets. Thus, the Brent oil price in January-June 2010 accounted for USD 78,7 per 1 barrel on the average or by about 50% higher in price than for the same period of 2009. Prices for petrol and diesel oil on the Platt’s stock exchange increased by 45% and 41%, respectively, in comparison with the same period of 2009, accounting for USD 722 and USD 661 per 1 ton. And the purchasing price for Moldavian oil importers amounted to USD 754 per 1 ton of petrol (by 42,9% higher in price than in January-June 2009), USD 699,5 per 1 ton of diesel oil (by 39,9% higher in price), USD 608 – per 1 ton of liquefied gas (by 65,7% higher in price).

Eventually, the cost for the final consumers in January-June 2010 increased respectively: petrol – by 45,4% up to 13,04 leis per 1 liter (average six-monthly price), diesel oil – by 22,2% up to 11,47 leis per 1 liter, liquefied gas – by 48,3% up to 6,6 leis per 1 ton.

The retail prices since the beginning of this year changed many times: 7 times – for petrol, 5 times – for diesel oil, 2 times – for liquefied gas. At the end of first six months, in June the price for 1 liter of petrol accounted for 14,26 leis, diesel oil – 12,6 leis, liquefied gas – 6,9 leis.

It should be noted that the prices at the market of oil-products are rising inexorably. Such growth was mainly caused by the increase of oil cost and strong enough demand for fuel in the world. At the early August the world prices already exceeded the threshold of USD 80 per 1 barrel and if such trend continues, in the near future the prices for final consumers can rise as well.

According to Chairman of the Association of Oil-Product Importers of Moldova Valentin Bodisteanu, August doesn’t foretoken any serious changes at the oil-products market. “There is no flurry on world stock exchanges; the prices won’t change considerably, therefore, most probably, the month will be calm, without dramatic price fluctuations. But any prognoses are premature. It’s not a secret that there are factors that can affect the dynamics of world prices at any time – the Middle East situation, natural disasters, etc. Therefore, the overall tendency for growth of prices for oil products remains,” – considers Valentin Bodisteanu.

The oil-product importers are concerned about the reduction of oil-products consumption within the country to a far greater degree. That’s why, according to oil-product importers, import of main kinds of oil-products – petrol and diesel oil reduced considerably. According to the ANRE, in January-June 2010 the volume of petrol import accounted for 79,7 thousand tons or by 21,6% less against the same period of 2009. Taking into account that over the last 3-4 years the deliveries of petrol in the country reached on the average 100-101 thousand tons per six-months, such reduction is rather tangible. In tote, due to existent reserves, the oil-product importers managed to sell by wholesale and retail more than 115 thousand tons of petrol at the actual prices. In December, before the increase of excises, the importers stocked up on oil-products at the old excise rate, what resulted in import reduction.

The largest petrol importers in Moldova in this period were the following companies: LUKoil-Moldova (31,6% of total volume), Petrom-Moldova (27%), Bemol Trading (12,7%), Tirex Petrol (10%), Rompetrol Moldova (5,9%). Petrol was mainly imported from Romania, the share of which made up about 67,7% of total import volume to Moldova in January-June 2010. Out of total petrol import volume 12,7% were imported from Greece, 8% - from Lithuania, 6,8% - from Bulgaria, 4,5% - from Belarus.

Diesel oil imports in January-June 2010 reduced as compared to the same period of 2009 by 8,9% - up to 122,1 thousand tons. The wholesale selling of the diesel oil reduced by 1,9% - up to 74,9 thousand tons, while the retail sale increased by 8,4% and accounted for 90,6 thousand tons. The leader on the diesel oil import to Moldova is LUKoil-Moldova company, the share of which made up 34,2% of the total import volume in January-June 2010. The share of Tirex Petrol accounted for 19,2%, Petrom-Moldova – 10%, Bemol Trading – 9,2%, Rompetrol Moldova -7,6%, Moldis Trading - 5,4% and Parstar-Petrol - 5,1%. Diesel oil was mainly imported from Romania (51,6%), the Ukraine (28% of the total import volume in January-June), Belarus (10,6%), Greece (9,2%) and Lithuania (0,2%).

The liquefied gas import to Moldova increased in January-June 2010 by 7,1% and accounted for 30 thousand tons. The wholesale and retail trade of liquefied gas reduced by 12,8% and 3,4%, respectively, accounting for 12 thousand tons and 24,1 thousand tons. The main importers of liquefied gas to Moldova in this period were: Dominic (33,8% of the total import volume), LUKoil-Moldova (26%), Printemps (10,2%), Tirex Petrol - 8,1% and Moldinergaz (7,3%). The largest volumes of liquefied gas – 62,5% - were imported from Russia. The liquefied gas was also purchased from the Ukraine (18,5%), Kazakhstan (15,4%), Romania (2%) and Belarus (1,8%).

According to Valentin Bodisteanu, the reduction of oil-products consumption – is quite a natural phenomenon, taking into account, that practically all sectors of economy underwent the influence of financial and economic crisis. “Construction, cargo transportations, industry and other sectors of economy are on the decline. There is nowhere we might expect the consumption growth when the production and industry in the country don’t develop … Commercial banks credit the consumption, and the real sector isn’t supported by anyone. In the near future the financial and economic situation in the country will hardly change for the better,” – Valentin Bodisteanu comments on the situation.