Ukraine to hike tariffs on Russian oil transit to EU

Kiev wants to increase the fees by 25% starting in June, according to Transneft

Ukraine will significantly raise transit fees for Russian oil running through the Druzhba pipeline on its territory to the EU on June 1, TASS reported on Tuesday, citing data from Russian oil and gas transport company Transneft.

It is expected that Kiev will increase tariffs for transporting crude to Hungary and Slovakia by €3.4 per ton to €17 ($18), bringing the total hike to 25%.

The planned increase in transit costs will be the second this year, after Kiev raised the tariff by 18.3% in January. Prior to that, the tariff was hiked twice last year.

Ukraine has cited the destruction of the country’s energy infrastructure which resulted in “a significant shortage of electricity, an increase in its costs, a shortage of fuel, and spare parts” as the main reason behind the decision.

Russian business daily Kommersant reported last month that Kiev was planning to hike transit fees for Moscow by over 50%. According to the outlet, Ukrainian pipeline operator UkrTransNafta had applied for a two-step increase in transit prices, by 25% from the current $14.6 per ton to $18.3 on June 1, and by an additional 23.5% to €21 ($22.6) on August 1.

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Ukraine continues to collect payments for fuel flowing through pipelines in the country, while urging EU countries to stop purchasing Russian oil and gas.

Kiev is currently negotiating the hike directly with buyers in Slovakia, Hungary, and the Czech Republic, according to media reports.

Druzhba, one of the longest pipeline networks in the world, carries oil around 4,000km from Russia to refineries in the Czech Republic, Germany, Hungary, Poland, and Slovakia.

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