High-Octane League: Second Time

High-Octane League: Second Time

President of the Ukrainian Fuel Traders Association Dmytro Kulyk speaks of the strategy and tactics of the new season’s game of the industry’s largest association.

In 2010, a professional team has formed in the Ukrainian petroleum pitch. The Association of Operators of Petroleum Products Market of Ukraine (AOPM) rallied the largest reputable networks of filling stations and wholesale suppliers of petroleum products around in order to jointly defend high standards of operations and protect the interests of the market.

Consistent with traditions in sports, the history of the Association includes eminent players, fierce competition, the attempts to establish unified rules of the game, a tough referee and, of course, high stakes.

Among the association’s most notable victories over the past years, there was diversification of imports of petroleum products and the struggle to reduce the amount of surrogate fuel on the market. At one point, the AOPM prevented the introduction of protective import duties on motor fuels; achieved differentiated excise taxes for fuel depending on its quality; and insisted on the introduction of the same excise on all components of motor fuel. As a result, adding benzol to gasoline became an unprofitable endeavor.

In the fall of 2016, Dmytro Kulyk, an experienced manager and leader of major petroleum assets, replaced Leonid Kosianchuk as AOPM President. The task set by the members of the Association before the new leader was to boost the effectiveness of the association in lobbying the interests of the market. Within a short period of time, the association gained a significant victory – in cooperation with the state authorities, it finally managed to resolve a critical problem of incomplete payments of retail excise by certain unscrupulous operators.

In February, the association was renamed the Ukrainian Fuel Traders Association (UFTA), reflecting the current composition of its members and the intensification of efforts aimed at resolving said issues. «Liquefied gas has been tightly and irrevocably integrated into the petroleum products market, so I don’t think it makes sense to divide the issues into «gas related and «non-gas-related,» says Kulyk.

Having gained a reliable base, the new president of UFTA faces numerous issues, ranging from protecting the companies’ business reputation amid claims by the anti-trust watchdog, AMC, in a so-called «petrol case» to establishing a dialogue with the security agencies for unhindered and unbiased clearance of goods.

In an interview with TerminaL, UFTA President Dmytro Kulyk speaks about the new line-up of the Association, his priority tasks and ways to achieve the stated goals, his fight for improving the quality of fuel and purging the market of shadow schemes.

TerminaL: How has the Association’s composition changed since you’ve been elected? Why was it decided to expand it?

There was no decision on mandatory expansion of UFTA’s composition. We do not believe that the Association should be a massive structure, based on the principle «the bigger, the stronger.» The Ukrainian Fuel Traders Association is one of the largest industrial associations anyway. It includes retail gas stations WOG, OKKO, Shell, AMIC Ukraine, Socar, KLO, Parallel, SunOil, and wholesale supplier BNK-Ukraine. UFTA members provide some 40% of the turnover at the fuel market.

But at the moment we are considering several new candidacies for membership, interested in a civilized and competent approach to the development of oil and gas industry.

What are the tasks for 2017?

Our tasks remain generally unchanged:

  • preventing restrictions on the freedom of trade and sources of supply and sale of petroleum products on the Ukrainian market, including through the provision of preferences, subsidies, application of restrictive trade measures and other administrative barriers;
  • ensuring equal working conditions for all market participants and avoiding discriminatory approaches by state authorities, including supervisory bodies, to certain market participants and, first of all, to members of the Association;

Read full interview — High-Octane League: Second Time.

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