The end of Igor Kolomoisky's oil empire. Sergey Kuyun claims we can forget about "Privat" as a player in the market.

The largest Ukrainian gas station network, owned by Igor Kolomoisky's "Privat" group and its partners, is running out of fuel. For any network, the disappearance of even one product from the assortment, even for an hour, is a crisis. However, "Privat" has been "dry" on certain items for the past three months.

At the height of its power, around the end of the 2000s, Privat controlled over 1,600 gas stations—25% of the total in Ukraine—and sold every third liter of fuel in the market. Its influence was so strong that it could blackmail the government by manipulating prices or removing price caps. Not to mention the aggressive tactics used to acquire numerous gas stations.

However, the secret to that power turned out to be quite simple. In the fall of 2022, the state nationalized the semi-state "Ukrnafta" and "UkrTatNafta," which had been under "Privat's" control since 2003 and 2007, respectively. Igor Kolomoisky himself ended up behind bars. Since then, the network has begun to literally crumble.

Initially, it pulled its 537 gas stations out of the consolidated "Ukrnafta" network (these stations had once been sold "cheaply" to "Ukrnafta" by "Privat," but continued to operate under the former owner until the end).

Then, "PrivatBank" reclaimed 245 gas stations that had been mortgaged for loans, but they had also been used by the Privat group for eight years.

Approximately up to 200 stations remain in occupied territories.

Currently, the network comprises around 550 gas stations, many of which are closed. The mobile app lists 430 addresses. The market share in sales stands at 5%.

But the main issue is that the owned stations have started to decline.

Almost immediately, the stores—which are a vital component of modern gas stations—emptied out.

In the summer of 2024, reports began to surface about delayed salaries for staff and reduced salaries for regional managers.

At the same time, rumors about a lack of funds for payments to fuel suppliers emerged. By October, fuel began to disappear. By early January, diesel was completely gone, and as of today, A-92 gasoline is available at 28% of the operator's stations, A-95 at 12%, and liquefied gas at 5%. Sales through the app have ceased, and it is unknown how many vouchers and cards are still in circulation, but I suspect there are quite a few.

Why has this happened? Why do other stations continue to operate and strive for development while such a sprawling network is declining?

Because "Privat" never earned purely from its gas stations. "Privat" profited from "Ukrnafta" and "UkrTatNafta," turning its gas stations into ATMs for cash withdrawals for its owners.

I have previously written multiple times about the flourishing schemes to rob "Ukrnafta," where simply by selling oil from "Ukrnafta" at reduced prices, "Privat" earned over $1 billion in 2009-2010 alone.

A similar amount was siphoned from the company in 2015 when "Ukrnafta" shipped 1 million tons of oil to "Privat's" firms without payment and then purchased huge volumes of fuel from those same firms, which it has yet to receive.

According to Sergey Koretsky, head of "Ukrnafta" and "UkrTatNafta," "Privat's" firms owe these state companies at least 100 billion UAH.

Even war did not change anything. In late April 2022, an auction was held for the sale of liquefied gas from "Ukrnafta," and the resource was sold to "Privat" at a reduced price. The losses for "Ukrnafta" amounted to 380 million UAH. Ultimately, the assets were nationalized for refusing to pay taxes...

Tell me, why struggle with a network, invest, take risks, hire thousands of people, dress and train them, if you can just sit in an office and earn money that these gas stations could never even dream of?

But when the primary source of income for "Privat" was taken away, decline was only a matter of time. The biggest advantages were extensive coverage and low prices, which were subsidized by the aforementioned income from operating state assets.

At the same time, competitors, lacking refineries, focused on improving their facilities and services. A real arms race ensued: specialty coffee, gourmet burgers, and other consumer-friendly innovations. Prices equalized because "Privat" found itself on equal footing with the rest of the market in fuel procurement. Who would want to go to an old gas station with a restroom in a thicket when there are options nearby with maple syrup pastries, cleanliness, and fuel at the same price?

What’s next? In the past year, there have been reports of attempts by Mikhail Kiperman (who heads "Privat's" oil business) to regroup under the new conditions. There have been discussions about bringing in external managers, transferring part or all of the network to management. There were also proposals to sell part of the stations on the market. But nothing took off.

The longer this endless nightmare continues, the more horrific the end will be. Returning to the market will become increasingly difficult for these gas stations every day. Consumers are fleeing, and many people are left with unused vouchers in hand, which is not easily forgotten.

And if the assets are distributed sooner or later, then "Privat" as a player in this market can be forgotten. The Privat group has proven unable to operate in a highly competitive environment, just like any oligarchic business. Parasitizing on state assets, monopoly, and access to tariff regulation—these are the secrets of success. But in the fuel market, one must bend over for every penny and cater to customers.

This story is very illustrative and instructive. How much public money has gone into the pockets of oligarchs? How many businesses have failed to emerge or have collapsed due to being suppressed by monopolies? What kind of country could we have had if we had effectively utilized state resources and enterprises? Who knows, perhaps we wouldn't find ourselves in the pit we are in now.