The Customs Union of Russia, Belarus and Kazakhstan violates contest on the Ukrainian petroleum product market and forms obstacles for the operation of international businesses in Ukraine and for the economies of some countries of the European Union, according to the EU-Ukraine Business Council.

"The formation of the Customs Union directly influences Ukraine: it violates contest on the motor fuel market in the country, is a real economic threat to the Ukrainian oil refining sector, and could affect oil refining facilities in some neighboring EU countries," reads a letter of the EU-Ukraine Business Council sent to First Vice Premier of Ukraine Andriy Kliuyev.

The Business Council noted that the key problem is long-term subsidizing of Russian, Belarusian and Kazakh oil refineries, which can purchase Russian crude oil at a large discount and not pay export duty.

"Hence, the rest of the countries, including Ukraine and the European Union, purchases Russian crude oil at prices set on the international market, and makes payment for the export duty. Thanks to current situation, petroleum products are made in the Customs Union with the misuse of competition and the use of unfair competitive advantages," reads the letter.

According to the council's experts, subsidized imports are pushing Ukrainian and European petroleum products from the domestic market, while supplies of petroleum products from the Customs Unions are growing thanks to the worsening of the positions of European and Ukrainian producers.

The Business Council admitted that without a quick and common reaction to the problem by main players on the Ukrainian market and the Ukrainian government, provisions of motor fuel from the Customs Union could totally push Ukrainian and European products from the market, as they cannot compete now under current conditions.

As it was admitted, Ukraine has started a special investigation into the import of certain types of fuel in Ukraine, irrespective of their country of origin.

Ukraine's large gas station chains, which mainly import fuel, also criticized the introduction of the duties, stressing that the measure will translate into the monopolization of the market by the Ukrainian oil refineries, as well as trigger price hikes of fuel.

Concern over possible duties was expressed by the embassies of Lithuania, Romania and Poland in Ukraine in a letter recently directed to the Ukrainian prime minister.