Gasoline at 100 hryvnia – myth or reality: how the market is reacting to threats from the AMCU
6 March 15:43
ANALYSIS
Over the past few days, fuel prices at gas stations in Ukraine have risen significantly, sparking lively discussions among drivers and experts. The price increase occurred almost simultaneously across many gas station chains, prompting the Antimonopoly Committee of Ukraine to take an interest in the situation. The agency demanded that market operators explain the reasons for the increase in the cost of gasoline and diesel fuel.
Against this backdrop, the media and social networks began to actively discuss a possible price increase to 80-100 hryvnia per liter, which caused a wave of excitement among drivers. Some experts even talked about a scenario in which fuel could cost more than 100 hryvnia. At the same time, other experts are urging people not to panic and explaining that such forecasts are largely exaggerated. Oil market expert Leonid Kosyanchuk explained in a comment to "Komersant Ukrainian" what the cost of gasoline in Ukraine actually depends on and under what conditions the price at gas stations could approach 100 hryvnia per liter.
Why fuel prices are rising
According to Leonid Kosyanchuk, the fuel market is currently being influenced by global processes in the world energy market, in particular tensions in the Middle East.
“I would be very cautious about some experts’ claims of 100 or 120 hryvnia per liter of fuel, because this fuels unjustified hype. Hype is inappropriate right now,” the expert notes.
He explains that Ukraine is heavily dependent on world markets, as almost all fuel is imported.
“Ukraine is integrated into the global economy and cannot remain on the sidelines of global events. The world has effectively entered an energy crisis due to the situation in Iran and the Persian Gulf. The Strait of Hormuz is still blocked, and about 20% of the world’s oil and a third of the world’s gas passes through it,” says Kosyanchuk.
These risks have already affected European markets, on which the Ukrainian fuel market directly depends.
Ukraine is 95% dependent on imports
The expert emphasizes that Ukraine imports more than 95% of its fuel, so any fluctuations in world markets instantly affect prices at gas stations.
“Yesterday, the resource cost up to 75 hryvnia per liter at the Ukrainian border. And we must realize that we consume more than 95% through imports. Some countries have restricted exports, some have introduced so-called premiums, adding an extra $90-200 per ton. And that’s why the price is rising. That’s one side of the story,” the expert explains.
Why there is excitement in the market
At the same time, Kosyanchuk draws attention to the behavior of individual market operators.
“Our gas station chains suddenly raised prices on Monday and started talking in the media about a possible increase to 80-100 hryvnia per liter. This created a rush of demand. It turned out that the thunder hadn’t even rolled yet, but the farmer had already crossed himself,” he says.
According to the expert, the synchronized price increase by different chains may be subject to investigation by the Antimonopoly Committee if the regulator finds signs of collusion.
“Let that be on the operators’ conscience. As for the fact that they raised prices simultaneously and on the same day, let the Antimonopoly Committee deal with it if it finds corporate collusion there,” he says.
Can the state regulate gasoline prices?
The expert also critically assessed the statements of the Antimonopoly Committee of Ukraine regarding the need to explain the reasons for the increase in fuel prices.
“You know, I’ll tell you this: the Antimonopoly Committee, in my opinion, came out with a very interesting statement. It started saying: let them explain to me the reason for the price increase — the justification. But what does the Antimonopoly Committee have to do with pricing? The Antimonopoly Committee should be concerned with monopolistic positions, corporate collusion, and so on,” Kosyanchuk said.
According to him, price increases are not in themselves a violation of the law.
“Price increases are legal in themselves. You need to read Articles 10-11 of the Law of Ukraine “On Prices and Pricing.” There is no state regulation of prices for petroleum products. Therefore, if I charge 150 hryvnia per liter today, I am within my rights and am not violating anything. Another thing is whether anyone will buy gasoline from me at 150 hryvnia,” the expert explained.
He added that Ukraine operates on the principle of free pricing, which is enshrined in law.
“Part one of Article 44 of the Commercial Code regulates these issues. Free prices are the contractual price between the buyer and the seller. I set the price at 150 hryvnia, you bought it — this means that we have entered into a contract and you have agreed to my terms,” Kosyanchuk said.
At the same time, he emphasized that the situation changes if the operator has a monopoly position in the market.
“It’s a different matter if I have a monopoly in the region — for example, I have over a hundred gas stations in the Kyiv region, and no one else sells such volumes. In that case, price increases in a monopoly situation may be subject to review by the Antimonopoly Committee,” the expert concluded.
Under what conditions could gasoline cost 100 hryvnia?
According to the expert, gasoline at 100 hryvnia per liter is only possible if there is a significant increase in world oil prices, but even in this case, it will depend not only on the cost of energy.
“I think that for this to happen, oil would have to cost around $120 or even $150. But this is not the only factor that influences the situation. There is also the National Bank, and it is unclear how it will behave. We are hostages to global processes because Ukraine is integrated into the global economy,” Kosyanchuk explained.
He stressed that the situation is complicated by Ukraine’s almost complete dependence on fuel imports.
“Our own oil refining industry has been virtually destroyed, so we cannot provide ourselves with petroleum products from our own production. Moreover, the oil that burned in Brody was Ukrainian oil that was intended for export, in particular to Hungary. We have nowhere to put it, but stopping production would be like shooting ourselves in the foot,” the expert noted.
Kosyanchuk stressed that the situation on the market is much more complicated than it seems at first glance and urged drivers not to panic.
Is it worth stocking up on fuel?
The expert urges drivers not to panic and not to buy fuel in bulk.
“It’s not as easy as it might seem. But the worst thing we can do right now is to start filling up canisters and putting them on the balcony, waiting for some ‘shahid’ to fly in and burn down the whole house. That’s stupid. You can’t stock up on fuel for a lifetime. Fill up and drive,” he said.
According to the expert, the hype is only hurting the market.
“Today, I was driving to work and noticed that there were fewer cars on the roads. Maybe that’s even a good thing, because people are now driving where they need to go, not just anywhere — to the market, to the store, or just for fun,” Kosyanchuk concluded.
Read us on Telegram: important topics – without censorship
