Fuel underground: Cabinet launches new system for protecting strategic reserves

In Ukraine, part of the minimum reserves of oil and petroleum products are planned to be stored in underground storage facilities. The Cabinet of Ministers is launching a corresponding pilot project for the period of martial law, but not longer than two years. Ukrtransnafta will be responsible for storing strategic reserves, and the Ministry of Energy will coordinate the project.

The corresponding decision is enshrined in a resolution of the Cabinet of Ministers.

Why is fuel being transferred to underground storage facilities

One of the main tasks of the new mechanism is to increase the security of strategic fuel reserves in wartime.

Ground-based fuel infrastructure remains vulnerable to missile and drone strikes. Therefore, it is proposed to place minimum reserves of oil and petroleum products at special underground storage facilities.

The project will be experimental in nature. It will operate under martial law, but the total duration of its implementation should not exceed two years.

Reserves will be transferred to Ukrtransnafta

The key role in the new system is assigned to Ukrtransnafta. The company will be responsible for the direct storage of state reserves of oil and petroleum products.

For this, it is planned to use special state facilities that are not subject to privatization.

If such capacities are not enough, the company will be able to attract additional property. In particular, it is envisaged to lease the necessary facilities from the State Agency for Reserve Management.

Who else will participate in the project

The Ministry of Energy has been designated as the coordinator of the experiment.

It is also planned to involve the Ministry of Economy, NJSC Naftogaz of Ukraine and the Market Operator in the implementation of the project.

The underground storage of strategic reserves will be financed from the state budget, as well as from the financial resources of the companies involved in the implementation of the project.

The experiment may become a permanent system

For now, the new mechanism is being introduced as a temporary one.

After the experiment is completed, the Ministry of Energy will have two months to analyze its results.

Based on the results, the Ministry of Energy is to prepare proposals for possible changes to the legislation. Thus, if the model of underground storage of strategic reserves proves effective, it could potentially receive permanent regulatory regulation.