Despite a challenging operating environment due to aggressive competitive policies of importers, the ORLEN Lietuva Group’s sales volumes in 2019 rose 0.8% year on year, to 8,512 thousand tonnes. The best figures were reported for middle distillates, with sales going up 4.4%. Sales volumes of the Jet A-1 aviation fuel also rose considerably, up 24.9% year on year. Sales of diesel oil grew 2.1% year on year.
On the other hand, sales of light distillates declined by (4.9)% year on year.
ORLEN Lietuva actively participated in balancing the ORLEN Group’s deficits on the Polish market. In 2019 significant product volume were supplied to Poland both by road and sea.
For several years now, Ukraine’s economy has been growing at a satisfactory pace. According to the IMF, in 2019 the country’s GDP grew 3.0% amid high inflation, of 8.7%. Ukraine continues to be perceived as an unstable, risk-laden market, which does not encourage new investment with a potential to drive growth in transport needs.
In 2019, the downward trend in gasoline consumption, which had continued for a number of years, finally reversed. The gasoline market rose by as much as 13.3%, while diesel oil consumption went up 5.3% year on year. The second half of 2019 saw a significant drop in the supply of diesel oil following imposition of a 4% duty on the Russian product supplied via pipeline. This put an end to diesel oil supplies via this route and meant that imports from Belarus, Lithuania and by sea needed to be significantly increased. In 2019, Jet A-1 consumption returned to 2018 levels, down (35)% on 2018, mainly as a result of closure of the legal loophole that permitted blending the Jet A-1 fuel with diesel oil.
In 2019, as in previous years, the Ukrainian fuel market faced strong pressures from Russian and Belarusian exporters offering competitively-priced products. Despite this, the ORLEN Lietuva Group’s fuel sales hit a record high of nearly 1m tonnes. The largest contributors were sales of gasoline and the Jet A-1 fuel. Among factors that helped achieve such excellent results were supply constraints and its reputation of a reliable and trustworthy supplier.
The source of the ORLEN Lietuva Group’s greatest competitive advantage is the precision and timeliness of supplies, regardless of any geopolitical developments in the region. The ORLEN Group has been building its position as a stable and reliable partner for years. It is the only Western oil group operating in Ukraine, whose condition is least affected by the unstable political landscape in Ukraine, not to mention the country’s fraught relations with Russia.