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fuel. In addition, because Ukraine is a net importer of oil products,
the market is strongly dependant on world market tendencies and
price.
Although the market of oil products is constantly growing,
from year to year Ukrainian petroleum refineries are decreasing
their production. When in 2005 the Government imposed zero rate
import duty, these actions led to influx of foreign oil products in
Ukraine. Importers offered petrol at the same price, although
comparing to their Ukrainian rivals the quality of imported
products was much higher. Due to this reason the share of foreign
oil products (from Belarus, Romania, Lithuania and Russia)
increased dramatically. In 2005 the share of foreign companies
was only 10%, in 2006 it accounted to almost 25% and at the end
of 2007 the foreign share is estimated to be up to 45% of all oil
products sold in Ukraine.
Another drawback of Ukrainian refineries is low
production efficiency comparing to European competitors.
Main trend of oil retail market was acquisition of small
companies by key players in the field. According to experts only in
2007 the number of retail companies, which sell oil products
decreased three times – up to 1500. Large quantity of filling
stations (more than 6.000 all over Ukraine) and strict competition
also had a positive influence on quality of service, which now
equal to European. In order to support reputation and staid
company image, retailers invest millions in advertising campaigns
and offer their consumers premium-quality petrol (euro-3, 4, 5
standards).
There are five gas-processing plants (GPPs) in Ukraine.
Unlike oil refineries, Ukrainian GPPs are not independent entities.
GPPs are part of larger oil/gas producers (or their regional
branches). Three of them (Hnydytsevsky, Kachanivsky, and
Dolynsky) are incorporated into Ukrnafta; and two of them
(Shebelinsky and Seleschensky) are in the
Ukrgazvydobuvannia/Naftogaz structure. Together, Ukrainian
GPPs and privately owned small gas processing units produce only
about 1.2 million tons per year. GPPs are involved in the

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