Economy

An expert explained whether there are reasons for a “fuel rush” in Ukraine

The Ukrainian fuel market is experiencing a new wave of price hikes. Over the past ten days, gasoline and diesel prices at gas stations have risen by anywhere from a few to 15 hryvnias per liter. Videos are also appearing online showing Ukrainians stocking up on diesel en masse, fearing a possible shortage and a significant price hike.

However, as energy expert Gennady Ryabtsev stated in a comment to "Komersant Ukrainian", despite the panic and temporary fuel shortages at some gas stations, a systemic shortage is not expected in Ukraine. The expert noted that there are sufficient volumes of gasoline and diesel.

“There is no shortage; supplies are coming in continuously, without any problems. But this, in my view, is an unjustified price increase, with little basis—or rather, based solely on the desire, the self-interest, to preserve profits, which, unfortunately, has led to a rush of demand for petroleum products,” Ryabtsev noted.

According to Ryabtsev, it is very difficult for him right now to understand the logic of the major retail chains, which, despite falling oil prices, continue to raise their prices.

“What’s the rationale there? There are the so-called Platts quotations, which are tied to oil prices. If we take these spot quotes—looking at them right now—then applying them to the cost of wholesale shipments did indeed result in a wholesale price a few days ago that was higher than the retail price. But these are spot quotes. None of the traders purchased petroleum products based on these quotes. But it is precisely this level of Platz quotes that is embedded in the pricing policies of the system operators,” says the expert.

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Ryabtsev notes that there are currently no objective reasons for a sharp price increase.

“In other words, their marketing departments said that to maintain margins, prices needed to be raised by 15–20 hryvnias. And, in fact, the management of these large chains said, ‘Fine, let’s raise them.’ And now we have a paradoxical situation. Even when crude oil prices were at 110 and remained at that level for a month, prices for gasoline and diesel fuel were lower than they are now, when crude oil prices are at 80,” explains the expert.

However, he immediately notes that it is practically impossible to influence the current situation in the fuel market.

“Unfortunately, consumers have absolutely no way to influence the policies of major operators, and the government simply ignores the way traders are taking advantage of motorists. To resolve this, there’s a recommendation on what needs to be done: we need to follow the European model. Under that model, retail operators are required to disclose the breakdown of retail prices on their official websites and justify every price change. This is how it’s done in Poland, the Czech Republic, Slovakia, and Germany. But our operators do as they please,” notes Ryabtsev.

According to the Ministry of Finance’s website, the latest reported prices at Ukrainian gas stations are as follows:

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