KYIV - The Ukrainian government's plans to introduce duties on the import of fuel to Ukraine will end the equality on the market which has been achieved not long ago, Patrick Van Daele, the general manager of Shell Ukraine Exploration and Production, said at a conference dedicated to Ukraine and organized by The Economist magazine, together with the Foundation for Effective Governance in London on Tuesday.

According to him, Shell is currently fighting against the Ukrainian government's plans to introduce import duties, as it will undermine the profitability of such companies as Shell which are engaged in retail business.

Van Daele said the company had managed to win a considerable share on the retail fuel market due to the import of high-quality fuel and an improvement in the level of servicing. According to him, when the market fell by 10-15% in 2009, the company's sales rose by 30%, although it sold fuel at a relatively high price.

Shell's representative also noted that the balance on the highly competitive market in Ukraine had been disturbed already with the renewal of fuel imports on preferential terms, and only recently the situation had been settled.

In his words, one of the major challenges for doing business in Ukraine is frequently changing rules of the game on the Ukrainian market.  "The budget law still sets rules for gas production licensing every year. It [the law] was published only in July [2010], yet, they [the rules] were changed again," he added.

As was reported, the Fuel and Energy Ministry is initiating the introduction of fuel import duties at a rate of up to EUR 120 per tonne to encourage domestic oil processing. 

NOTE:  Shell is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.