Hungary set to pay Ukraine a transit fee for Russian oil -sources

Kitco Media
By Reuters
Published:
Updated:
Reuters
MOSCOW, March 31 (Reuters) - Hungary will start to pay Ukraine for the transit of Russian oil through the Ukrainian section of the Druzhba pipeline in order to maintain its supplies, two sources familiar with the matter told Reuters. The development comes after Ukraine's Ukrtransnafta notified Russia's pipeline operator Transneft of its plans to raise the fee it charges for the transit of gas, the sources said. Although Kyiv has called on all countries to stop buying Russian energy, it continues to collect payments for the oil and gas flowing through pipelines that pass across Ukraine. Ukrtransnafta increased the transit fee to 13.60 euros per tonne from Jan. 1 and asked to make the fee twice as high. "As of today, there are no prerequisites or reasons to expect that Druzhba will not transport oil as usual in April," an Ukrtransnafta spokeswoman told Reuters. She declined to comment on matters relating to transit fees. Transneft did not respond to a Reuters request for comment. Transneft proposed that buyers of oil which flow through the Druzhba pipeline should pay Ukrtransnafta themselves, the sources said, and Hungarian oil refiner MOL Group had agreed to start making such payments.


As MOL and Ukrtransnafta need to prepare a new agreement, the transit fee increase is expected from May, the sources said. European buyers of Russian oil will pay for the transit themselves as the fee is within the formula price they pay for the volumes, one of the sources said, although technically payments are made by Transneft to Ukrtransnafta. An issue over payments between pipeline companies arose last year after EU sanctions caused a suspension in oil supplies via the route. The issue was resolved by MOL making the payment. MOL owns refineries in Hungary and Slovakia, both of which are fed by the Druzhba pipeline's southern spur. The other refiner that receives oil via the route is Czech Unipetrol, which is controlled by Poland's PKN Orlen. Supplies via the Druzhba pipeline were not included under the European Union embargo on Russian oil. "We keep monitoring the situation and remain in contact with our partners but we don't comment on their plans or the substance of discussions with them" PKN's press office said in response to questions from Reuters. MOL did not reply to requests for comment. Russia's piped supply of Urals crude via the southern spur of the Druzhba pipeline in the January-March quarter was set to rise 6% on a daily basis from October-December 2022.
(Reporting by Reuters reporters, additional reporting by Krisztina Than, Jan Lopatka, Pavel Polityuk and Marek Strzelecki; Editing by Alexander Smith)

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