UKROBORONPROM OFFERS FUEL SUPPLIERS CLEAR PRICING RULES

The State Concern "UkrOboronProm"(UOP) offers UOP enterprises and oil traders to switch to formula pricing for long- and medium-term contracts. This was discussed during the meeting "Improving fuel procurement for UOP enterprises", attended by representatives of supplying companies.

UOP representatives are convinced that objective rules for adjusting prices – in the face of constant changes in the oil market – are urgently needed. Formula pricing will allow reacting promptly to quotations of petroleum products’ value, thus contract fulfillment will be cost-effective for both suppliers and enterprises. At the same time, this significantly reduces the risk of non-fulfillment of the contract. In addition, formula approach makes the price adjustment mechanism transparent.

Thus, according to Vitalii Tsvihun, director of exporters, supply, information and analytics department, the price of the fuel – supplier buys from the manufacturer – may fluctuate according to the situation on the market. But the margin earned by the oil trader when concluding long- and medium-term contracts should remain stable.

In addition, the State Concern supports strengthening responsibility for both companies and oil traders. The first ones should avoid delay in signing of contracts (it is proposed to limit the time for their conclusion to a two-week period). Others are to adhere to and fulfill their own commitments taken during the tender.

Compliance with all the conditions mentioned will ensure uninterrupted fuel supplies to enterprises of the defense-industrial complex.

Ukroboronprom is ready to provide UOP enterprises-participants with reviews of the situation in the oil market, so that they could form objective bidding levels at tender bids.

The pilot project on the tender announcement with the formula definition of fuel prices will start in the near future at one of the largest UOP enterprises – SE "Antonov".