Gasoline for 60 UAH: why auto fuel is becoming more expensive and what is happening in the oil market of Ukraine

In Ukraine, the price of auto fuel changes almost weekly – both gas, gasoline and diesel. Thus, prices for the latter have increased even more since the beginning of spring, on average 1.5 hryvnia per liter. According to experts, there are several reasons, in particular logistics and rising excise tax prices. However, the question arises: how exactly has the fuel pricing policy changed and what to expect this summer?

There is a high probability that price increases will not stop anytime soon. This may be due both to the fact that gas station owners themselves regulate the pricing policy, setting whatever “price tags” they wish, and to difficulties in the oil market.

Fuel prices as of April

For example, according to the Ministry of Finance, in mid-April in Ukraine, A-92 gasoline rose in price by another 10 kopecks (up to 51.46 hryvnia per liter), A-95 - by 5 kopecks (up to 54.44 hryvnia), diesel - by 2 kopecks (up to 54.64 hryvnia).

At the same time, the highest “tariff” for gasoline and diesel was set by networks such as OKKO and WOG, which increased the cost of fuel by 2 hryvnia. In view of this, other gas stations decided to follow the same algorithm.

According to the agency “A-95”, if on March 19 “fifth” gasoline cost an average of 52.85 hryvnia in the country, then on April 15 it was 54.44 hryvnia, and on April 25, in just ten days, it was already 54.72. UAH

During the period March-April, gasoline A-92 rose in price from 49.53 to 51.76 hryvnia, A-95 plus - from 56.43 to 58.01 hryvnia.

The same is with diesel - from 53.2 hryvnia per liter in mid-March, it rose in price and began to cost 54.38 hryvnia already on April 25. However, we note that the maximum price tags at some gas stations are higher than average. For example, for A-95 gasoline they reach 59.80 hryvnia, and for diesel - up to 56.39 hryvnia per liter.

How does the cost of auto fuel differ between regions?

Director for strategic development of the BRSM-Neft gas station network, Alexander Melnichuk, noted that previously exports to Ukraine were carried out from Poland, so prices were lower in the West of Ukraine. However, the situation has changed.

“Previously, gasoline and diesel were transported en masse across the Polish border. Therefore, in the western regions, prices at gas stations were among the lowest. Now the situation has changed - the Polish border has become “impassable”, and fuel flows mainly through the southern borders. Now the lowest price tags in the Odessa region. In the west of the country they have grown, since we have to transport the resource to Lviv through Odessa,” he explained to the Ministry of Finance.

According to Melnichuk, in the BRSM-Neft gas station network in Kyiv, A-95 gasoline costs 50.99 hryvnia per liter. At the same time, in Odessa the same 95 is sold for 50.29 hryvnia, in Lutsk the price tag reaches 51.29 hryvnia, and in Lvov - 51.99 hryvnia. The price is the same high, for example, in Zaporozhye.

It is interesting that the most expensive 95 gasoline, which costs 55.47 hryvnia per liter, is in the Chernihiv region, but the price tag remains constant here, unlike other regions.

In second place is the Donetsk region, where gasoline was sold for 55.46 hryvnia as of mid-April. There, too, no price increases have been recorded. At the same time, in the Transcarpathian region, where gasoline costs 53.49 hryvnia per liter, it has risen in price by 9 kopecks since April 12.

What is the situation with diesel?

Interestingly, according to the A-95 agency, the most expensive type of fuel in the Donetsk region costs 56.29 hryvnia per liter, but the price remains constant for a long time. In the Chernihiv region, diesel is sold for 55.77 hryvnia per liter, and prices have also stopped.

At the same time, in the Transcarpathian region, diesel remains one of the cheapest in the country and costs a considerable 53.3 hryvnia per liter. It’s interesting that in the Odessa region, through which the bulk of the fuel now passes, diesel has even fallen in price to 54.45 hryvnia per liter.

Cancellation of gas station licenses: causes and consequences

Earlier it was reported how in mid-November last year, employees of the famous Avantage 7 gas station chain held a rally near the walls of the State Tax Service of Ukraine in the Kyiv region. This was due to the decision of the tax authorities, which the company called illegal. Then the work of 18 stations and an oil depot was stopped.

Unfortunately, last year such cases were not isolated - so the tax service seriously “took on” fuel dealers, canceling thousands of licenses in less than two years.

In total, in 2022, the State Tax Service canceled 4,300 gas station licenses, and in the first six months of 2023 - already 2,600. Among them is an AMIS facility in the capital, which was subjected to a missile attack and, after restoration, could not obtain a license due to the insufficiency of “one” pieces of paper."

This was one of the reasons why fuel prices began to rise even more at the beginning of 2024.

Let us add that after the destruction of the Kremenchug oil refinery by the Russians, Ukraine was left virtually without its own oil refining, so this fight between tax authorities and gas stations had a negative impact on the profitability of the fuel business in Ukraine and was reflected in a sharp increase in gasoline prices for ordinary citizens.

Fuel costs are rising due to oil prices: the situation on the Ukrainian oil market

The head of the A-95 agency, Sergei Kuyun, explains the increase in fuel prices for two reasons. So, the first of them is the obvious rise in prices for oil and petroleum products.

“Since the beginning of the year, oil prices have increased by 15%. For some time, retail fuel prices at domestic gas stations did not respond to this trend at all. Not least because the networks made very large stocks, and there was an obvious overflow in the market.” But new batches are arriving at new prices, since petroleum product producers raise prices after oil prices rise,” says Kuyun.

The rise in oil prices is also associated with the acceleration of industrial growth in China (in January-February it was plus 7%, this is a record for the last three years), attacks by Ukrainian drones on Russian ones, as well as a further reduction in exports by Saudi Arabia within the framework of OPEC agreements.

So, as of mid-April, oil costs a little more than $90 per barrel - due to the fact that after the Iranian attack, Israel did not immediately begin to escalate and took a pause, the price even decreased slightly.

It is worth noting that as soon as the price of oil reaches $100, this will absolutely indicate a significant increase in fuel prices in the world, including in Ukraine.

“Every additional dollar in the oil price is up to plus 50 kopecks per liter of gasoline or diesel. A jump in the price tag from 90 to 100 dollars, if there is one, is very serious - an increase in the price of a liter of fuel by 5 hryvnia. But, most likely, the price increase will go smoothly,” says Alexander Melnichuk, director of strategic development of the BRSM-Neft gas station network.

What will happen to the price of fuel in the summer?

At the end of March 2024, the Cabinet of Ministers of Ukraine adopted the draft law. They are offered a gradual increase in excise taxes on all types of fuel, which will go through five stages: the first should take place in July 2024, the last in 2028.

Thus, according to the Government’s proposals, in 2024 the excise tax on every thousand liters of gasoline should increase in price by 29.1 euros, diesel fuel by 38.1 euros, and liquefied gas by 3.6 euros. After this, four more stages of increase are planned, each of which is approximately the same amount.

As noted in the Cabinet of Ministers, this is necessary for joining the EU, but an equally objective reason is the fact of the need to fill the country’s budget.

“Everything happens under the auspices of European integration, but one way or another it comes down to money. This is logical, because taxes are money, money is weapons, weapons are defense,” says Dmitry Leushkin, founder of the transport group of companies and the Prime gas station network. .

According to Economic Pravda, provided that the relevant bill is adopted in the next two months, the first revision of excise taxes could take place as early as early July. At the same time, prices at gas stations will increase, but what the increase will be depends on the reserves of fuel that traders will bring with the old taxes (excise duty is paid when crossing the border).

Fuel prices as of April 25, 2024

According to AUTO.RIA, as of April 25, the average cost of A-95+ gasoline is UAH 58.01. In turn, A-95 costs 54.72 hryvnia, A-92 – 51.76 hryvnia and diesel – 54.38 hryvnia per liter. Autogas costs 27.84 hryvnia per liter.

As previously reported, in Chernivtsi, a local “tycoon”, a person involved in crime cases and businessman Andrei Gamazinsky is building a probably illegal gas station. Journalists from StopCora, together with activists from the NGO “Stop Corruption” queue, conducted a raid on objects belonging to Mr. Gamazinsky. As it turned out, although construction work is being carried out at the sites, according to the city council, the businessman did not receive any permits for them.