Ex. 2. Answer the following questions.

1. How can the markets of petroleum products be classified?

2. What is the result of the present structure of the branch of petroleum product supply in Ukraine?

3. What construction may serve as the final solution for shipping petroleum to Ukraine?

4. What does the classical scheme provide for?

5. What is necessary to arrange to complete the scheme?

Ex. 3. Read the following false statements and correct them:

1. Markets of petroleum products can be classified on the basis of one design.

2. Each stage of storage and wholesale and retail trade is considered to be a lot of elements in the structure of the market of petroleum products.

3. The final solution of diversification couldn’t be reached by means of construction of a sea petroleum trans-shipping complex.

4. The market of petroleum and petroleum products is never built in accordance with the classical scheme of separated activities and competition.

5. The establishment of an independent regulatory body is not necessary to arrange.

Ex. 4. Translate into Ukrainian:

The beginning of the growth of retail prices took place simultaneously with the lowering of the offer on the market, as a result of which the traders were not in a hurry to sell them at low prices. The rate of price growth increased starting from the second half of October, which coincided with the minimum of the offer. “The crisis of the market” reached its culmination. The least changes took place in the offer associated with diesel fuel the demand for which is satisfied, to more than a half, by national producers. Prices for the high octane number gasoline which are predominantly imported and whose offer fell most of all were the highest.

The growth in prices stimulated the growth in offer and in steady raising of the rate of production at refineries of Ukraine. The growth in the offer resulted in gradual reduction of prices. The impact caused by administrative price regulation is also indicative of the natural character of the reaction of the market. The administrative price regulation having been introduced, a significant number of entrepreneurs, for a certain period, continued to sell gasoline at prices exceeding the regulated ones. In four regions (the Dnipropetrovsk, Transcarpathia, Kirovograd, and the Lugansk regions), as a result of the regulation, prices on the whole grew and then smoothly, simultaneously with the prices for high octane number gasoline which were not regulated and were under the impact of competitive forces were reduced to the level being lower than the level of regulated prices.

UNIT 28

Household Gas Meters

The total demand for household gas meters (hereinafter referred to as “meters”) in Ukraine till 2001 is equal to 8,000,000 devices.

The market of meters is national, but it can be subdivided conditionally into several product groups: meters for apartments in multistory buildings, meters for gas boilerrooms of hospitals, schools, kindergartens.

The technology of production and the design of the meters make it possible for the bulk of enterprises to produce a number of types of meters and to respond quickly to changes in the structure of the demand. This makes it possible to consider the market of meters as a whole for the needs of the present research.

A special role on that market is played by the State Stock Holding Company “Ukrgaz” (hereinafter referred to as “the Company “Ukrgaz”).

First, the Company “Ukrgaz” and its subsidiaries as subjects of natural monopoly on the market of services rendered in the sphere of transportation of natural gas by distributive gas pipelines have the exclusive right to authorize the exploitation of meters. In addition, in accordance with the Resolution of the Cabinet of Ministers of Ukraine of June 9, 1997 No. 546 ” On the Procedure of the Introduction, Exploitation, and Control over the Use of Systems and Apparatus for Taking Stock of Natural Gas Consumed by Population, Communal Enterprises, Enterprises of Everyday Services, and Budget Organizations” the Company “Ukrgaz” was defined to be the sole customer, buyer, and controller to check the use of systems and apparatus for taking stock of natural gas consumed by population, communal enterprises, enterprises of everyday services, and budget organizations. At the same time, the right to sell and assemble gas meters was given only to the subsidiaries of the Company “Ukrgaz.”

Second, the Company “Ukrgaz” is a founder of joint ventures and that is why is interested in the installation of meters made by such joint ventures as the Joint Venture “Shlumberge-Ukrgaz Matters Company”.

Third, proceeding from the fact that the norms of gas consumption in daily round significantly exceed its real consumption, the Company “Ukrgaz” is objectively interested in the preservation of the system of settling with the population for consumed gas on the basis of the overstated norms of consumption and not on the basis of readings on meters (it is known that if there are meters the figures showing the volume of consumed gas are reduced at least in two times, which cannot help affecting incomes of the Company “Ukrgaz”).

The mentioned circumstances create favorable conditions for significant distortion of competition and, in some cases, they can result in substantial restriction of competition on both markets (the market of meters and the market of their installation). This is done by means of refusal to purchase and install meters and by means of overstating prices for their installation, switching on, etc.

Ex. 1. Read and translate the text.

Ex. 2. Answer the following questions:

1. What is the total demand for household gas meters in Ukraine?

2. Which product groups can the market of meters be subdivided into?

3. What makes it possible for the bulk of enterprises to produce a number of types of meters and respond quickly to changes in the structures of demande?

4. Who plays a special role on that petroleum market of Ukraine?

5. Which circumstances create favourable conditions for significant distortion of competition?

Ex. 3. Read the following false statements and correct them:

1. The market of household gas meters is not national.

2. The technology of production and the design of the meters do not make it possible for the enterprises to respond quickly to changes in the structure of the demand.

3. There isn’t a single founder of joint ventures in Ukraine that could be interested in the installation of meters.

4. The norms of the gas consumption never exceed its real consumption in Ukraine.

5. There are no substantial restrictions of competition on the market of meters and the market of their installation.

Ex. 4. Translate into Ukrainian:

For the time being, there is the following paradox situation on the market. At the beginning the norms of gas consumption in daily round were raised, which stimulated the population to install meters, and later on the population, producers of meters, and installing organizations became dependent on the good will of the artificially established monopolist which, in addition to other matters, was not interested economically to introduce meters. At the same time, according to the experience of some countries having transitional economies, that monopoly scheme can work if the monopolist (the Company “Ukrgaz”) is properly stimulated to install meters. This can be done by means of the transfer of such surplus incomes of the Company “Ukraz”, its subsidiaries, and the State Communal Enterprise “Kyivgaz” that are formed owing to overstating norms of gas consumption, to a special transit account to finance expenses associated with the introduction of meters.

In addition, the removal of the discriminatory methods of approach practiced by the Company “Ukrgaz” and its subsidiaries during the purchase and installation of meters will favor the introduction of the system of purchase of meters and conclusion of contracts concerning their installation exclusively on a competitive basic (auctions, tenders, etc.). It will also be useful to introduce other requirements concerning activities on markets of both household gas meters and their installation, in particular by means of the elaboration and adoption of a resolution of the Cabinet of Ministers of Ukraine which would provide for the procedure of purchasing and installing household gas meters by the Company “Ukrgaz”, its subsidiaries, and the State Communal Enterprise “Kyivgaz.”

In the end, after the implementation of the Multi-Branch Program in Production of Apparatus for Taking Stock of Consumed Gas and in Equipping Housing Resources with Them which was elaborated in accordance with the Resolution of the Cabinet of Ministers of Ukraine of June 14, 1995 No. 422, any exclusive right which is not associated with the requirements of technology and security must be repealed. This will be useful to consumers and will create conditions for normal functioning of the markets of supply of gas to communal and household consumers, the markets of supply of household gas meters and their installation.

UNIT 29