The world practice of feedstock taxation for petrochemical production plants will provide Karpatnaftochim with equal conditions for entering the market.

The world practice of feedstock taxation for petrochemical production plants will provide Karpatnaftochim with equal conditions for entering the market.

On June 8, 2017, KARPATNAFTOCHIM Ltd., the most powerful petrochemical company in Ukraine, will be started up. The work will be provided to 1950 personnel of the plant, as well as 750 employees of related and service organizations.

The new start-up of the production after five years of shutdown will be due to the introduction in Ukraine of world practice of petrochemical feedstock taxation. In December 2016, the Tax Code of Ukraine expanded the list of feedstock subjected to zero excise tax rates in case of further processing. Liquefied gases and butane were added to naphtha and diesel fuel. By Resolution No. 229 dd April 26, 2017, the Government determined quotas for KARPATNAFTOCHIM Ltd. for the delivery of feedstock: liquefied gas – 1070 million liters per year; naphtha – 1170 million per year; diesel fuel – 985 million liters per year. Processing of each out of indicated volumes can ensure the output of 250 thou. tons of ethylene per year.

“Nowhere in the world feedstock for further processing is subjected to excise. We are not going to process the entire amount of feedstock stated in the Resolution; we simply do not have such capacities. We use only the amount that will ensure the release of no more than 250 thou. tons of ethylene per year”, – the press service of KARPATNAFTOCHIM Ltd. states.

The selection of feedstock will depend on the condition of feedstock and commodity markets. In 2017, the main feedstock will be naphtha, but it is possible to use LPG or diesel fuel. The introduction of all types of feedstock in the Resolution No. 229 will provide the plant with industrial flexibility and a permanent appeal to the government in the event of any change in situation of the market will not be required.

KARPATNAFTOCHIM Ltd. declares zero probability of feedstock non-purpose use that is delivered on preferential terms. The Tax Code of Ukraine provides the control and recording of feedstock deliveries and the output of finished products by a special tax station of the State Fiscal Service of Ukraine. For each batch of feedstock, KARPATNAFTOCHIM Ltd. will issue a bank bill with payment after ethylene output. Soon, online reporting on the amount of feedstock and products used will be available on the site of the plant.

“The work of KARPATNAFTOCHIM Ltd. is not connected with politics or politicians. Our goal is to restore the production and return its market positions, which are occupied by importers. Earnings on non-payment of taxes – it is not our way”, – stated at the company.

Concerning events accreditation dedicated to the start-up of KARPATNAFTOCHIM Ltd. will be reported later.

Press-service of KARPATNAFTOCHIM Ltd.