Stella Zenkovich reports on recent downstream developments in Russia and Central ...

Stella Zenkovich reports on recent downstream developments in Russia and Central Asia: · The Polish Government has revised its strategy concerning the privatisation of its fuel sector, deeming that instead of two there will be only one major production centre. This implies the merging of PKN Orlen and Rafineria Gdanska (RG) and the final ousting of Lukoil, barring the Russian company from acquiring an RG stake. Meanwhile, RG has signed a new cooperation agreement and possibly cross-ownership with other independent refineries Czechowice and Jaslo, indicating that it intends to fight off privatisation. The independents are thought to feel threatened by Slovak refiner Slovnaft. · Managing Director Zarko Pavlovic has announced that ExxonMobil Hungary, with 31 filling stations, is to serve as regional corporate centre for lubricant sales in southeast Europe. · In accordance with the International Monetary Fund’s (IMF) demand, Bosnian fuel prices and taxes, both direct and in-direct, are being harmonised and will, in due course, be standardised by the two constituent entities of Bosnia-Hercegovina, the Muslim-Croat Federation and the Respublika Srpska, as well as the former’s Brcko District. · Aiming to persuade the IMF to release the next $17mn credit tranche, the Azeri Government has increased fuel prices at the pumps from $50/t to $150/t while leaving them unchanged for water, gas and power utilities and state companies. Meanwhile, the gas tariff has been increased to $87/1,000 cm to reflect ‘real costs’, since Azerbaijan gets Russian gas for $52/1,000 cm at the border and the cost of transportation via the pipelines of Azerigaz is $35/1,000 cm.

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