Fuel prices may drop, but not immediately: what is keeping prices high in Ukraine
21 April 16:03
FORECAST
The question of whether fuel prices in Ukraine will fall amid the situation surrounding the Strait of Hormuz remains open. Despite some signs of stabilization, experts urge caution regarding optimistic forecasts.
In an exclusive comment to "Komersant Ukrainian",economist Andriy Novak emphasizes that it is too early to talk about a rapid drop in fuel prices.
“At this point, it is still premature to speak of a significant drop in fuel prices due to the unblocking of the Strait of Hormuz for the simple reason that it has not yet been fully unblocked, and the further development of military and political events remains unknown,” Novak said.
According to him, even if events develop positively, Ukrainian drivers will not feel an immediate effect.
“Secondly, there will definitely not be such an immediate reaction to the price drop in our domestic Ukrainian market,” the expert explains.
According to him, a price drop is possible only gradually and provided that stable shipping through the strait is fully restored. Only then, with a certain time lag, prices may begin to fall at Ukrainian gas stations.
However, even in the best-case scenario, a return to pre-war price levels seems unlikely. Novak notes that the market has already adapted to the new conditions: “Gas station chains have seen that Ukrainians are willing to pay higher prices anyway.” This is especially true for businesses and those who depend on transportation in their daily activities.
The economist also highlights domestic market factors, particularly a possible “monopoly collusion” among gas station chains, which could be holding back price reductions. Under such conditions, even positive global trends do not guarantee proportional price reductions for consumers.
The slight decrease in the price of A-95 gasoline observed recently, as the expert emphasizes, has local causes.
“This is explained solely by supply-side factors,” Novak notes.
In particular, decisions by neighboring countries to reduce the tax burden on fuel played an important role. Ukrainian operators likely took advantage of the opportunity to purchase cheaper resources, which affected the price of certain brands.
Thus, the situation on Ukraine’s fuel market remains dependent on both global geopolitics and domestic economic factors. A rapid drop in prices is not to be expected, and any changes will likely be gradual and limited.
Note that on Tuesday, April 21, popular gas station chains updated their fuel price tags.
How fuel prices have changed
OKKO and WOG significantly reduced the price of standard diesel fuel—by 2 UAH/liter compared to the previous day. It is sold at both chains for 89.90 UAH per liter.
A similar price drop is observed for branded diesel fuel (92.90 UAH instead of 94.90 UAH).
At the same time, diesel and autogas became cheaper at the state-owned “Ukrnafta”—by 1.60 UAH and 1 UAH, respectively.
The SOCAR network is currently keeping its prices unchanged compared to the figures from April 20.
Breakdown of prices at gas stations on April 21
OKKO
- Pulls 100 gasoline: 85.90 UAH
- Pulls 95 gasoline: 78.90 UAH
- A-95 Euro gasoline: 75.90 UAH
- Pulls Diesel: 92.90 UAH
- Euro Diesel: 89.90 UAH
- Gas: 49.90 UAH
WOG
- Gasoline 100: 85.90 UAH
- Gasoline 95 (Mustang): 78.90 UAH
- Euro 95 Gasoline: 75.90 UAH
- Mustang diesel: 92.90 UAH
- Euro-5 diesel: 89.90 UAH
- Gas: 49.90 UAH
SOCAR
- NANO 100 gasoline: 85.99 UAH
- NANO 95 Gasoline: 79.99 UAH
- A-95 Gasoline: 75.99 UAH
- NANO Extro diesel: 94.99 UAH
- NANO Diesel: 91.99 UAH
- Gas: 49.98 UAH
“Ukrnafta”
- Gasoline 98 (Energy): 78.90 UAH
- Gasoline 95 (Energy): 72.90 UAH
- A-95 Gasoline: 69.90 UAH
- A-92 gasoline: 66.90 UAH
- Diesel (Energy): 88.90 UAH
- Diesel (Energy): 86.90 UAH
- Gas: 48.90 UAH
It should be noted that sharp fluctuations in the global oil market—ranging from a nearly 10% plunge to a new threat of price hikes due to the situation around the Strait of Hormuz—have already begun to affect prices in Ukraine. Despite geopolitical tensions, fuel prices are generally trending downward, and at gas stations, a downward trend has emerged following a prolonged period of price increases. At the same time, the market remains vulnerable to news, creating the potential for both further declines and a new round of price increases.
