Despite dependence on imports, no fuel shortage in Ukraine, and prices lower than in EU thanks to cashback program - Ukrainian Oil and Gas Association

The key reason for the rise in fuel prices in Ukraine is the situation on the European market, on which Ukraine depends directly. Nevertheless, the market in Ukraine is stable, there is no shortage, and fuel remains cheaper in absolute terms than in most EU countries due to the introduction of cashback from the state. The Ukrainian Oil and Gas Association has stated this.

"The fuel market in Ukraine remains competitive: there are dozens of operators, prices are formed by the market, and the state constantly monitors the situation. State-owned companies, in particular Ukrnafta, also play an important role in the stability of supply. The main thing is that there is no fuel shortage. Ukrainian companies and the government are working together on a daily basis to maintain supply stability and prevent interruptions. Currently, supplies are stable, filling stations are operating normally, and the market is well supplied even during the sowing season. The supply system remains stable even in times of war. And fuel for Ukrainians costs less than in most EU countries," the Ukrainian Oil and Gas Association said in a statement.

The Association explains that the key reason for the rise in fuel prices is the situation on the European market, on which Ukraine is directly dependent today. After the complete loss of oil refining infrastructure as a result of a full-scale war, Ukraine switched to importing finished fuel. Therefore, the prices of petroleum products in Europe, not oil, are crucial for Ukraine.

The Association names the following reasons for the rise in fuel prices:

• geopolitical tension around the Strait of Hormuz, which is one of the key routes for global oil supplies;
• increased demand in the EU due to the fact that countries are actively building up reserves;
• field work season;
• increasing logistics costs;
• exchange rate fluctuations and the tax burden, which is about 38–42% of the price of a liter.
• At the same time, in absolute terms, fuel in Ukraine remains cheaper than in most EU countries, the Ukrainian Oil and Gas Association emphasizes.

For comparison: in Germany and France, gasoline costs UAH 103 per liter and diesel - UAH 113 per liter in terms of hryvnia, in Poland, gasoline costs UAH 86 per liter and diesel - UAH 96 per liter, respectively.

In Ukraine, gasoline costs about UAH 71.7 per liter, and with the state cashback, it costs about UAH 64.6 per liter. Diesel is UAH 84.6 per liter, and with the national cashback UAH 72 per liter, the Ukrainian Oil and Gas Association emphasizes.

"To support consumers, the state has introduced cashback mechanisms that partially compensate for fuel costs and reduce the financial burden on households and businesses. The state cashback returns from 5% to 15% of the cost of fuel, depending on its type. Due to this, Ukrainians pay 25-40% less than in neighboring EU countries," the Ukrainian Oil and Gas Association explains.

As you know, President of Ukraine Volodymyr Zelenskyy initiated the National Fuel Cashback program, which has been in effect since March 20. "The program will apply to consumers of diesel, gasoline and automotive gas in Ukraine and will work through a cashback system, allowing to compensate for part of the fuel costs," the President said.

Under this program, Ukrainians will be refunded part of the money for refueling their cars: 15% for diesel, 10% for gasoline, and 5% for gas.

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