Starting in 2027, Ukraine will launch a pilot project for the underground storage of petroleum products from the minimum reserves of oil and petroleum products (MZNN), according to Cabinet of Ministers Resolution No. 1037 of August 13, 2026, published on the government portal.

According to the resolution, the pilot project, initiated by the Ministry of Energy, is to last no more than two years.

“Starting from the beginning of the third base year (2027), market participants and operators are required to store a portion of diesel fuel—amounting to at least 20% of the total volume of this type of petroleum product—from the MRPS in underground petroleum product storage facilities,” – states the implementation procedure for the pilot project attached to the resolution.

The project provides for the creation of an extensive system of underground petroleum product storage facilities and conditions for their safe storage, as noted in the procedure.

The Ministry of Energy has been designated as the coordinator of the pilot project, and JSC “Ukrtransnafta” as the specialized responsible storage operator.

At the same time, the operation of the specialized responsible storage operator grants other market participants the right to store petroleum products in their own underground storage facilities.

The list of state-owned facilities whose property may be used as underground storage facilities is specified in the confidential section of the resolution.

The Ministry of Energy must ensure the project’s implementation in cooperation with, among others, NJSC “Naftogaz of Ukraine,” “Ukrtransnafta,” and the “Market Operator.”

Serhiy Kuyun, director of the consulting firm A-95, commented on the pilot project, noting that there are currently no underground storage facilities in the country, and with only four months left before the deadline, no one will even have time to develop a project. At the same time, he pointed out that the resolution provides for the use of oil pipelines, salt caverns, depleted oil or gas fields, and other geological formations for these purposes.

Kuyun also noted that in the near future, state-owned banks, by government decision, may begin providing loans for underground petroleum product storage facility projects at an annual interest rate of 10%, with the state subsidizing the remaining interest. According to him, the loan amount could range from 100 million UAH to 1 billion UAH. At the same time, Kuyun suggested that in such cases, there would be a strict requirement to bring the storage facilities into operation within a year.

However, in his opinion, a year is an unrealistic deadline, so the government needs to speed up the approval process for project documentation, which currently takes one to one and a half years. The director of A-95 also noted that private gas station network operators have already begun construction of underground storage facilities “at their own risk,” while simultaneously seeking approval for their projects.

He also drew attention to the broader issue of storing MZNN starting in 2027.

“The law (on MZNN), although blocked by subordinate regulations, is formally in effect, and currently the MZNN quota stands at 6% (of the market—Ed.), or approximately 600,000 metric tons. This is a volume that physically cannot be stored anywhere—neither underground nor above ground. And no one is going to store it on land, because that would be business suicide. If nothing changes, the quota will automatically increase to 9% starting in 2027,” Kuyun described the situation.

He added that the Ministry of Energy understands the problem and has prepared amendments to the law, which already number 300.

“The positions are as follows: everyone, without exception, understands the main point—reserves are needed, but they must be protected. And these reserves must remain in Ukraine; fantasies about storing them abroad are quickly dispelled,” the director of A-95 concluded.

As reported, parliament passed the MZNN law on November 21, 2023.

The explanatory note to Bill No. 9024-d stated that its adoption would allow for the creation of a system of minimum reserves of crude oil and petroleum products in Ukraine and would regulate relations in the sphere of managing such minimum reserves, as well as ensure Ukraine’s compliance with its obligations regarding the implementation of Directive 2009/119/EU.

According to Vasyl Danylyak, CEO of OKKO Group, establishing minimum oil and petroleum product reserves is only advisable once Ukraine has a sufficient network of underground storage facilities.

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Last modified: August 29, 2026