Fuel prices in Ukraine: why are they rising and how much will we be buying petrol in the future
11 October 17:37The average price of fuel in Ukraine increased by 0.13 kopecks per litre of A-92 petrol over the past week. Experts say that the increase in the cost of fuel on the Ukrainian market may be due to the growing demand for liquefied gas and rising import prices.
Kommersant asked economic expert Andriy Novak about the situation on the Ukrainian fuel market.
The situation on the fuel market: what is happening
According to the A-95 Consulting Group, the average wholesale price of liquefied gas increased by UAH 1,430 per tonne to UAH 56,810 per tonne from 2 to 10 October. At the domestic producers’ auction on 9 October, the weighted average price increased by UAH 1,458/t to reach UAH 56,318/t.
High demand for gas remained, especially at the UEEX auction, where Ukrgasvydobuvannya sold the entire volume of gas at prices of UAH 56,895-57,505/t. Auction prices exceeded 58,000 UAH/t, which puts pressure on traders. In a private auction on 8 October, prices were 55,810-56,880 UAH/t, up from 53,000-54,960 UAH/t a week earlier.
Experts pay particular attention to the eastern part of the country, where gas consumption has reached record levels. Factors such as cold weather increase the need for energy, leading to significant price fluctuations. The UEEX auctions continue to be the preferred market for many participants, and competition is becoming increasingly fierce, putting additional pressure on traders.
The south and west of the country are also experiencing increased demand, which is driving prices up. The expected increase in supplies may not always be able to meet the growing interest from consumers, which could lead to further increases in LPG prices in the coming weeks.
As a result, increased demand and import prices are driving up retail and wholesale prices in Ukraine.
Why fuel prices are rising in Ukraine: expert opinion
According to Andriy Novak, there are two reasons for the rise in fuel prices. The first is the previous increase in excise taxes on fuel. Obviously, fuel at the prices before the increase is already running out in warehouses.
“The second reason is the recently adopted tax increases, which include advance payments to petrol stations. All of this has led to an increase in fuel prices, which, unfortunately, will not stop and will continue,” said Andriy Novak.
The energy expert explained that it is currently impossible to say what the limit of price increases will be, as they are ultimately formed based on supply and demand in the market and the degree of competition.
“Formally, we seem to have quite high competition in this market, there are many large networks, and there are no fewer regional individual networks or small regional networks. But given that we see prices for all types of fuel at petrol stations of large chains that are almost identical, or even if they differ by a few kopecks, this indicates a high probability of monopoly collusion. That is, the owners of large networks agree on a certain level of prices for all types of fuel and almost all networks have almost identical prices,” Novak elaborated.
How much petrol will cost in the future
In an exclusive commentary for , the expert explained that everything will depend on the monopoly collusion and the solvency of buyers. Because the solvency of Ukrainians is now decreasing, and due to the increase in electricity prices, the same fuel, now also adds a tax increase, and consumers can buy less goods and services. Therefore, the final price of fuel will be formed on the market.