"Eugen Doga" International Airport - Chisinau could face a fuel supply crisis: Lukoil is the only supplier at the airport
The operations of the "Eugen Doga" International Airport in Chisinau may be at risk due to a potential fuel supply crisis. Lukoil, the airport's sole fuel supplier, is currently under international sanctions. Experts have raised concerns about the uncertainty surrounding fuel availability, while authorities have been hesitant to officially acknowledge the issue.
Air operators have reportedly been informed of the potential problems and advised to take timely action.
“Aircraft refueling at Chisinau International Airport (RMO) is currently affected due to sanctions imposed by the US and the UK against Lukoil, the airport’s main fuel supplier. The Civil Aeronautics Authority of the Republic of Moldova (CAA RM), as the regulatory body overseeing Lukoil’s airfield operations, has been notified of the situation. Operators are advised to plan their refueling accordingly and consider alternative arrangements until further notice. Updates will be provided as the situation evolves,” reads a document posted online on Wednesday, October 29.
Asked by Teleradio-Moldova to confirm its veracity, representatives of the Civil Aeronautics Authority promised to get back to us with an answer, but they have not yet done so.
At the same time, representatives of the "Eugen Doga" International Airport - Chisinau responded to our questions in writing but did not provide answers by the time this article was published.
However, the consequences of the sanctions imposed by the US against the Russian companies Rosneft and Lukoil on the supply of fuel to the Republic of Moldova were addressed today by the Director of the Board of Directors of the National Agency for Energy Regulation (ANRE), Eugen Carpov, with representatives of the Embassy of the United States of America in the Republic of Moldova.
"Eugen Carpov presented the logistical structure of the petroleum products market in the Republic of Moldova, the existing import and distribution infrastructure, as well as the main regional sources of supply. The parties exchanged views on the assessment of the potential impact of the sanctions on the regional and domestic market, as well as on the need to identify alternative sources and ways to provide the Republic of Moldova with petroleum products", the ANRE press release states.
In order to facilitate a correct assessment of the procedures for implementing the economic and trade sanctions imposed by the United States of America, the interlocutors agreed to maintain a constant dialogue in the coming period, the same source adds.
Expert: Deficit and fuel price increases
According to the economic journalist, Ion Preașcă, an uncertain situation is indeed attested in the aviation fuel segment. He recalled that the authorities in Chisinau asked Lukoil to divest from this part of the activity, but the transaction has not been completed to date.
"The authorities have forced Lukoil to find a solution for this segment since the summer, that is, to sell it. As far as I understand, it has not been possible yet, because it is not easy to sell such an activity: a suitable buyer must be found, who can offer an adequate price and all legal procedures must be respected. Since the owners are abroad, any decision must be coordinated," Preașcă explained to Teleradio-Moldova.
The expert believes that the authorities should liberalize the market, allowing other operators to import petroleum products, in order to avoid a possible supply crisis.
At the same time, according to the economic journalist, a solution could be "the forced takeover of the company's warehouse, followed by sale, in compliance with the legislation".
Regarding a possible suspension of Lukoil's activities, Ion Preașcă says this could have consequences for the oil market in the Republic of Moldova, generating risks of a deficit and fuel price increases.
The main vulnerability, however, is not related to internal distribution, but to the dependence on imports of diesel and gasoline.
"I hope that this company will not stop its activity, in terms of importing and distributing petroleum products. With such a large share (almost a third of imports and about 20% of fuel distribution - ed..), stopping the activity may create difficulties in providing diesel, gasoline, and liquefied gas. This could lead to price increases and possible deficits", explained Ion Preașcă.
Moldova, dependent on refineries in Romania and Bulgaria
According to the expert, the major risk comes from abroad, as Lukoil Moldova imports most of its petroleum products from the group's refineries in Romania and Bulgaria.
"If one of these refineries stops, pressure is immediately created on prices and product availability, because other companies would also try to buy from the same sources", the journalist said.
He recalled that a breakdown at the Rompetrol refinery in Romania caused a temporary fuel shortage in the region in 2021, leaving some gas stations in the Republic of Moldova without diesel and gasoline.
"The biggest problem is with wholesale stocks. The lack of offers automatically leads to an increase in prices", Preașca pointed out.
How Lukoil became the main player on the oil products market in the Republic of Moldova
For almost three decades, Lukoil has been the largest importer and distributor of oil products in the Republic of Moldova. According to the analysis of economic journalist Ion Preașcă, the company's dominant position has gradually consolidated, due to a combination of strategic, economic and historical factors.
Lukoil entered the Moldovan market about 30 years ago, following the Russian Lukoil group's takeover of the Petrotel refinery in Romania. Before that, the company operated a refinery in Odessa (until 2014) and one in Burgas, Bulgaria, the latter being one of the largest in the Balkans.
Lukoil's success is explained by its vertical integration, with its own complete chain of activities – from oil extraction in Russia to refining, distribution, and marketing in both wholesale and retail segments.
“They control the entire chain, from extraction to sale, and this has always allowed them to have a large market share, being both producers, suppliers, and distributors. Moreover, when they entered the market, there was no major player. The state-owned company Tirex Petrol was very weak – it had only a network, but no financial or processing capacity. There was a lack of competition, so Lukoil was able to capture a large share from the start, which it has maintained. For about 20 years now, or maybe even more, the company has had the status of the largest importer and distributor of petroleum products in the Republic of Moldova,” the expert said.
It was only in the period 1999–2002 that the first serious competitors appeared – Petrom Moldova and Rompetrol, which brought some diversification to the market. However, the newly emerged local companies were unable to compete effectively with Lukoil, due to the lack of comparable resources and infrastructure.
Over the years, Lukoil has maintained a significant market share, which, according to estimates, has reached up to 40%.
“But the company avoided exceeding this threshold in order not to fall under the rules on dominant position and then it would have come under much stricter monitoring”, Preașcă added.
In a hypothetical scenario in which Lukoil would have to reduce its activity, the immediate impact on the domestic distribution market would not be significant, believes economic journalist Ion Preașcă. According to him, a possible closure of Lukoil stations would not lead to substantial shortages at the pump, since many gas stations operate under a franchise model — they belong to other companies, and Lukoil mainly serves as a fuel supplier. In such a situation, at most, a rebranding process could follow for some of these stations.
The real risks, Preașcă reiterates, would manifest themselves at the level of petroleum product imports.
“A possible shutdown of Lukoil refineries could lead to supply difficulties, because these refineries were built to process a certain type of oil. Switching to another type requires investments and technical adaptations,” said the specialist.
The journalist also recalled that similar situations were encountered in other European countries, such as the Czech Republic, Slovakia, Hungary or Austria, which needed time to adapt their refining infrastructure after giving up Russian oil. Moreover, an incident that occurred this summer — the contamination of Azerbaijani oil — demonstrated how vulnerable the market can be, as refineries in Romania could not temporarily take over those products.
Therefore, the greatest risks for the Republic of Moldova come from external factors.
“Therefore, external technical and logistical problems are the greatest risks for Moldova, not internal distribution. But, as a result, problems in distribution could also arise,” concluded Ion Preașcă.
We recall that the US and the United Kingdom of Great Britain and Northern Ireland have imposed economic sanctions against the Russian companies Rosneft and Lukoil, including their subsidiaries. The measures include asset freezes, blocking trade transactions, and restrictions on companies that are majority-owned by these companies.
Washington and London have justified the imposition of sanctions by Russia's refusal to stop the war in Ukraine and engage in a real peace process.
