Ukraine on Friday introduced special duties in the amount of 65% on coal imports from Russia to protect the domestic market, but such a decision.
According to the Ukrainian State Statistics Service, in 2019 Russia accounted for 58% of all supplies of coal and anthracite to Ukraine. In total, Kiev imported $ 2.8 billion of coal. In January and February 2020, Russia’s share in the supply of thermal coal to Ukraine exceeded 61%.
President of Ukraine Volodymyr Zelensky at an all-Ukrainian meeting of coal industry workers said earlier that import is now impossible in this industry. According to him, companies cannot import coal from those countries that close their markets to Ukrainian products.
Kiev planned to introduce special duties on Russian coal, with the exception of anthracite, coal for metallurgy and for the production of electricity and heat, from April 15, however, the entry into force of the decision was then postponed until May 1.
“In the process of working on the document, we were faced with the need to distinguish between coal mined in Ukraine and coal that we are forced to import. Therefore, the resolution (on special duties – ed.) Was quite a long time… but we were able to develop a mechanism that … establishes 65 percent duty on imports of the type of coal with which Ukraine is able to independently provide its market, “Ukrainian Prime Minister Denis Shmygal explained this step.
Decision to please the oligarchs
Ukrainian economic expert Alexander Okhrimenko believes that the Ukrainian authorities imposed a special duty on coal imports from Russia to please the oligarchs.
“A number of DTEK mines stopped in Ukraine due to the fact that the price of oil, respectively, coal fell. And at the same time, the cost of coal production in Ukraine is very high. Now, Ukrainian coal is not needed either in the EU or ours, no one needs it Therefore, in order to help the Ukrainian oligarchs, including Akhmetov, the authorities introduced these special duties so as not to supply coal from Russia, “Ohrimenko told RIA Novosti.
At the same time, the expert believes that such measures by the authorities will lead to a complete cessation of coal supplies from Russia due to its high price, which will arise due to special duties. “This is obvious. Its (Russian coal – ed.) Cost will be too high for us,” the expert said.
At the same time, he is convinced that such a decision will allow Ukraine to overcome the energy crisis by the fall. “But everything will return to its place by the fall, when coal will again be in demand, closer to the heating season,” Ohrimenko said.
Ukrainian expert Bogdan Oleshchuk also believes that such government measures will play into the hands of Ukrainian oligarchs, but not the population.
“Yes, coal supplies from Russia will stop. Akhmetov will launch his mines. But this will be reflected in payments for utilities, Ukrainians will have to pay more,” Oleshchuk told RIA Novosti.
The largest private investor in Ukraine’s energy sector, the company of Ukrainian businessman Rinat Akhmetov, DTEK, earlier announced the onset of an energy crisis in the country. According to DTEK, because of the import of electricity from Russia and Belarus, the demand for Ukrainian electricity has decreased, because of which the volume of coal consumption at Ukrainian stations has fallen.
According to Akhmetov’s company, about 2.9 million tons of unclaimed coal accumulated in the warehouses of thermal power plants and mines. The company also noted that at the moment, due to the “systemic crisis in the energy sector”, almost all coal mines have been stopped in the country, about 90 thousand employees in the coal mining sector are unemployed.
“The systemic crisis in the energy sector of Ukraine, provoked by manual regulation of the energy market, uncontrolled import of electricity from Russia and Belarus, as well as the lack of coordination of the industry by the Ministry of Energy, led to an imbalance in the Ukrainian energy system and the impossibility of stable operation of coal enterprises,” the company said.
DTEK asked the authorities to take urgent measures to overcome the crisis. Shmygal announced the development of measures to overcome the crisis in the energy sector. In Ukraine, an anti-crisis energy headquarters was created, headed by the prime minister.
Ukraine resumed electricity imports from Russia in the fall of 2019. Prior to this, Russian electricity was purchased in October 2015.
On April 8, the National Commission implementing state regulation in the fields of energy and utilities adopted a resolution restricting the import of electricity from Russia and Belarus for the period of quarantine due to the coronavirus COVID-19 and within 30 days from the date of its cancellation.
The fight against Russian imports
The Ukrainian authorities have been pursuing a policy of restrictions on Russian goods for several years. In particular, in July last year, Kiev introduced special duties on the import of Russian diesel fuel by pipeline, as well as on the import of liquefied natural gas. From October 1, 2019, duties on diesel fuel are 4%, and on liquefied gas – 3%.
From August 1, 2019, the Ukrainian authorities also introduced special duties on most Russian goods, except coal, coke and pharmaceuticals.