Energy Shortage Fuels Crisis in Ukraine : Economy: Erratic deliveries from country’s sole supplier, Russia, cripple transportation.
KIEV, Ukraine — A severe fuel shortage has crippled the provision of basic goods and services throughout Ukraine as the government of this fledgling country grapples with erratic deliveries of oil from its neighbor and sole supplier, Russia.
About 40,000 Kiev residents could not buy bread earlier this week after the city’s transport service failed to deliver 11 1/2 tons of bread to stores because of the fuel shortage.
Moscow had warned that it would stop delivering oil at subsidized prices last week after Ukraine abandoned the Russian ruble and declared the karbovanets, a temporary currency that has been circulating alongside the ruble for months, to be the sole legal tender in this nation of 52 million.
“Oh, we’ve got a crisis, all right,†said Vasyl Levchenko, press attache for the Kiev city administration. “Ambulances, food deliveries, police, mass transit--they are all affected.
“We are receiving only 200 tons of gasoline out of the 750 tons we need per day,†he said, adding that almost all state-run filling stations are empty. He noted that the problem “could have been avoided if our leaders had introduced the new currency earlier and had begun looking elsewhere for oil.â€
By abandoning the ruble, Kiev emphasized its intent to break out of the highly integrated economy of the former Soviet Union. But Ukraine’s economic independence is inherently limited because it depends on Russia for all of its oil and much of its natural gas.
Russian President Boris N. Yeltsin threatened to begin charging Kiev world prices for oil and demanding payments in hard currency almost immediately after Ukraine left the “ruble zone†established by the Commonwealth of Independent States, successor to the Soviet Union.
“This only shows how vulnerable we are,†Levchenko said. “No country should rely on any single source for over 20% of something as critical as oil, let alone the 100% dependence.â€
While Ukraine has already negotiated a deal to meet its minimum oil needs for 1993, it is seeking other sources on its own territory and abroad. “We’ll buy (fuel) anywhere, as long as it is convenient for us,†Yuli Yoffe, Ukraine’s deputy prime minister in charge of energy, said during a recent news conference.
Yoffe said that Ukraine had negotiated a deal to buy oil from Iran, which Iranian tankers would deliver to the Ukrainian port of Odessa. He said the shipment was delayed because of construction work at the port. But Myroslav Popovych, an official at the state committee on gas and oil, said financial arrangements were holding up the deal.
Popovych added that Ukraine had received proposals for oil sales from many Mideast nations, including Saudi Arabia and Yemen. He noted that the cost of such supplies seemed prohibitive.
Ukraine recently agreed to let Edge Petroleum, a U.S. oil company, begin exploration in the Black and Azov seas, as well as in the area of the Dnieper River.
“We realize we will remain energy-dependent on Russia for a long time because we simply can’t afford to buy elsewhere while we are in a deep economic crisis,†another deputy prime minister, Ihor Yukhnovsky, said recently. “We’ll just have to struggle through this.â€
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