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Who is behind increased Belarusian gasoline export to Ukraine?

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Businessman Mikalai Varabey, Viktar Sheiman, and Ukrainian politician Viktor Medvedchuk / collage by Euroradio​

In January 202, exports of Belarusian gasoline to Ukraine amounted to 77 thousand tons -- 60% more than in January 2020. For comparison, in 2019, Belarus supplied the same amount of fuel to Ukraine in two months.

We are talking about large sums. By the end of last year, a ton of Belarusian motor fuel cost Ukraine from $380 to $420, depending on the type. This means that the cost of all the gasoline supplied in January may exceed $30 million. 

But not all of this money goes to Naftan and Mazyr refineries. Part of it "settles" with the exporters. And here begins the most interesting part.

Who sells Belarusian gasoline?

Before 2020, only the Belarusian Oil Company had the right to officially export the products of the Belarusian refineries. Its shareholders were the Mazyr and Navapolatsk refineries, as well as Belorusneft. That is, the exporter actually belongs to the state.

But in the summer, the New Oil Company (NOC) was established in Belarus, which was also allowed to export petroleum products. The controlling stake in NOC belongs to businessman Mikalai Varabey, a close associate of Lukashenka, and the minority shareholders are the Development Bank and Belarusian Railways. Another Belarusian oligarch and longtime partner of Varabey, Alyaksei Aleksin, was previously mentioned among the possible co-owners. However, this information was not confirmed.

In the fall of 2020, the NOC began its export operations. The company states that at the initial stage it is engaged in the supply of dark oil products -- bitumen and fuel oil. However, it later turned out that supplies of diesel fuel purchased from the Belarusian Oil Company were carried out through the NOC.

In Ukraine, the NOC operates through the company Belkaztrans Ukraine. According to Euroradio, 51% of it is owned by the same Mikalai Varabey. In 2019 this company became the exclusive forwarder of coal in Ukraine. This, in its turn, caused difficulties for the companies of Russian oligarch Roman Abramovich, which struggled to export goods through Belarus.

At the end of 2020, Belarus became the third exporter of oil products. This right was given to Belzarubezhtorg, a structure of the Presidential Administration. In the past, it was Alyaksei Aleksin who managed the sale of oil products in the Presidential Administration. Now Belzarubezhtorg has the right to export dark oil products, as well as those classic "diluents and solvents," that were a part of the scandal which erupted in 2012. Under their guise, Belarus re-exported oil products, including motor fuel. This displeased Russia, which insisted that gasoline and diesel from duty-free Russian oil was for the domestic markets of Belarus and Russia.

BZT-Ukraine is a 100 percent subsidiary of Belzarubezhtorg

BZT-Ukraine, a subsidiary of Belzarubezhtorg, has been operating in Ukraine for several years. Interestingly, it was selling dark petroleum products even before permission was granted. But here too a possibility remains that BZT-Ukraine bought them from BNK to resell later. Something similar is done by the New Oil Company.

Medvedchuk's Shadow

"Putin's cousin", Ukrainian oligarch and MP Viktor Medvedchuk is indirectly one of the beneficiaries of the whole system of Belarusian oil products export to Ukraine. We already told you about his close ties with Aleksin and Varabey. And here's another one: together with Varabey, Medvedchuk is a shareholder of the Prykarpat-Zapadtrans pipeline. In the past the purchase of its shares was justified by cheaperer delivery of light oil products by "pipe" than by other means of transportation. It was even cheaper if you had your own pipeline.

Among the main buyers of Belarusian gasoline are large Ukrainian companies OKKO and WOG. Both companies previously used the services of the pipeline owned by Prikarpat-Zapadtrans. In addition to them, Belarusian oil products are actively purchased by companies of the Wexler Group, which (surprise!) is also linked with Medvedchuk. 

But that's not all. BRSM-Nafta (no relation to the Belarusian Youth Council) actively buys Belarusian oil products. It is associated with the Ukrainian politician and video blogger Anatoly Shariy, who plays "on the same field" as Medvedchuk. In general, Shariy and Medvedchuk are buddies.

Some petroleum products are exported to Ukraine in tank cars by rail. The build-up of these supplies benefits Belarusian railways. And, of course, it benefits the end representatives of the companies buying the Belarusian products. When supplies and transportation of Belarusian oil products through Ukraine are done by pipeline, Varabey and Medvedchuk benefit from increased exports.