Thursday, August 17, 2006

Fixing gasoline prices

The new Yanukovych government has pegged the price of gasoline and diesel fuel at gas stations, after talks with refinery owners and gas station owners several days ago. If the latter overstep agreed maximum prices, the government has said that deliveries to them will be terminated.

There are already reports of rationing in some areas, at a time of year when fuel demand is high because of agricultural requirements and the holiday season.

Some of the gas stations in the east of Ukraine are run by PoR 'big rollers', including Yanuk's son, so they won't be pleased. Many of Ukraine's refineries are wholly or partially owned by Russian and other foreign concerns, they won't be happy either.

Maybe Azarov's tax police will be used as in the days of Kuchma to 'assist' in compliance. Ultimately, you can't buck the markets. Who will be blamed when the gas stations close? Will Yushchenko intervene as he did in similar circumstances when Yuliya T was PM?

Thursday Update: Predictably, queues are already being seen at gas stations - a gas crisis may develop very quickly now..

1 comment:

R. Smith said...

What??!

I didn't know exactly what to expect from Yanukovich, but I'm confident it wasn't this.