Fuel at Ukrainian gas stations will become more expensive as a result of higher taxes.
On July 1, Ukraine abolishes the preferential 7% VAT on automotive fuel (it will be 20%) and returns to pre-war excise tax levels. This will lead to an increase in the price of gasoline by UAH 8 per liter and diesel fuel by UAH 3-4. But the price of autogas will rise slightly. This was stated by Oleksandr Sirenko, an oil market analyst.
According to economist Oleg Getman, the price increase will be gradual. “In terms of numbers, it will be up to UAH 8 per liter of gasoline and UAH 3-4 for diesel fuel. As for liquefied gas, I would be more optimistic based on the current situation. There is a lot of gas on the market and it is getting cheaper. I think we will see a plus UAH 1 in July, but definitely not UAH 3… There are no grounds for forecasting UAH 3 plus,” Mr. Sirenko said.
Hetman notes that the rise in fuel prices will primarily affect car owners. Other goods are not expected to rise significantly in price. “As economists, we cannot make any apocalyptic predictions… It will not happen all at once, most likely, but gradually, because different gas stations have different stocks… The secondary effects – (rise in price – Ed.) of food, other goods and services – are not estimated to be very significant. This adds an additional 0.3-0.5 percent to inflation,” the expert said.
As a reminder, in March 2022, excise taxes on gasoline and diesel in Ukraine were reduced to EUR 100 per thousand liters. VAT was also reduced from 20% to 7%.
However, in the fall of 2022, the legislation was amended to provide for the return of 20% VAT and pre-war excise levels from July 1, 2023.
