Ukraine buys cheap Russian fuel vat Baltic States

Exports of Russian liquefied petroleum gas (LPG) to the Baltic countries have had a twofold increase lately as buyers resell part of the fuel to Ukraine. Ukrainian companies use LPG as cheap fuel during the times of the conflict with Russia, Reuters reports with reference to sources.

LPG is used as car fuel as well as fuel for heating and petrochemical production. The sanctions that were imposed on Russia in response to the outbreak of the conflict in Ukraine, do not apply to LPG supplies. EU countries are free to import liquified petroleum gas from Russia, there are no formal restrictions there.

Interestingly, Latvia's LPG purchases from Russia account for 90 percent of the country's imports in the category. Another Baltic nation, Lithuania, buys 50 percent of its LPG from Russia and another 50 percent — from Latvia.

In December alone, Latvia and Lithuania delivered 15,000 tons of LPG to Ukraine, which amounted to 15 percent of the total imports of this type of fuel that month.

Ukraine does not buy Russian fuel directly. However, Reuters says, it buys it from the Baltic states at a discount of $150-200 compared to supplies from Poland and Romania.

Against the background of the imminent entry of the EU embargo on the imports of Russian oil products and the price cap on them, the exchange cost of Russian fuel, including LPG, dropped to multi-year lows.