In September 2022, the price of petrol and diesel fuel in Ukraine is not expected to rise. At the same time, there is a margin for lowering LPG car fuel prices.
Maksym Bielawski, Razumkov Center’s leading expert on energy programmes, said this in a comment for RBC-Ukraine.
Price stability
As the expert noted, starting from mid-August, the global market of petroleum products sees a decrease in the margin of petrol producers, which indicates stabilisation of this segment. A similar trend can be observed in the diesel fuel segment, but with a smaller gradient.
"In general, we should not expect an increase in the price of petroleum products in September, on the contrary, stabilisation of petrol and diesel prices should take place at a level of 52 and 57 hryvnias per litre, respectively," Mr Bielawski said.
According to him, the situation will further improve due to competition among traders, who, judging by the August results, have more than 300 counterparties.
The expert believes that introduction of a unified excise tax (100 euros per 1,000 litres) on petrol, diesel fuel and LPG "will only slow down the price reduction of petroleum products and will not have a decisive effect on the fuel price rise."
Transparency of pricing
As Mr Bielawski noted, pricing of petrol and diesel fuel is transparent. This is evidenced by the following: Compared to the petroleum product markets of the EU and Turkey, the maximum retail price of petrol in Ukraine (1.35 euros per litre) corresponds to indicative figures of Poland and Moldova. A similar parity is observed in the maximum retail price of diesel fuel — 1.45 euros per litre.
"At the same time, analysis of the maximum retail prices for LPG car fuel (propane-butane) in the EU and Ukraine indicates the potential for reducing the price of this fuel in Ukraine by up to 7%," the expert added.
Autumn forecast
Mr Bielawski believes that in the medium term of three months, there may be a slight increase in the price of petroleum products (in October, petrol and diesel fuel will reach 53 and 58 UAH per litre, respectively) solely due to the decline in the national currency exchange rate.
He also expects thatthe rate of decline in oil prices will, most likely, slow down in September, in particular due to the increase in the fees for passage of tankers through the Bosphorus and the Dardanelles.
We remind you that on August 30, the Verkhovna Rada adopted in the first reading the bill on reestablishment of excise taxes on petrol, diesel and LPG car fuel. Excise duties on petrol and diesel fuel will make 100 euros per 1,000 litres, on LPG car fuel — 52 euros per 1,000 litres
In an interview with RBC-Ukraine, the Chairman of the Verkhovna Rada Committee on Finance, Tax and Customs Policy Danylo Hetmantsev said that the Ukrainian authorities decided to partially return fuel excise taxes that were cancelled in the spring of 2022. At the same time, VAT will remain at the level of 7%, instead of 20%, as it was before the war.
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