Diesel Prices Have Dropped Significantly in Ukraine: What’s Happening in the Fuel Market
24 June 21:15
Fuel prices in Ukraine continue to fall—this applies primarily to diesel, which has dropped by another 1–3 UAH per liter over the past five days, according to price monitoring at select gas station chains. This is reported by "Komersant Ukrainian", citing “Interfax-Ukraine. “
According to the report, natural gas prices have also dropped by up to 1 UAH per liter.
Gasoline prices remain stable, at the same level as on June 17.
According to calculations by Serhiy Kuyun, director of the consulting firm “A-95,” the price of diesel fuel has already fallen by more than 12 UAH per liter from its peak of over 90 UAH per liter.
He noted that at the start of the crisis, the price of diesel fuel was 62 UAH per liter.
The expert also noted that smaller chains, which do not have remaining stock of fuel purchased at high prices, are lowering their prices more aggressively.
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Regarding gasoline, Kuyun explained that there has been no noticeable downward trend, since the difference between the purchase price (customs value) and the retail price during the “Iranian crisis” only returned to its pre-crisis February level in June.
“In other words, there are no excess profits that could explain the slowdown in price reductions. Gasoline margins have collapsed entirely, which is why prices aren’t really falling. Gas stations’ finances are currently being propped up by diesel, which, however, isn’t preventing it from falling in price rapidly,” Kuyun said.
At the same time, the director of “A-95” emphasized that Russian attacks on gas station networks continue, and these losses are also putting pressure on their finances.
“Last week, one of the major chains lost an oil depot containing $1.5 million worth of fuel. Another chain reports that it suffers 15–20 ‘lightning strikes’ every week in frontline regions. WOG has already lost 6–7 gas stations, each worth $1 million. Fuel and gas tankers are burning,” Kuyun described the situation.
He also noted that there had been an initiative to create a fund to compensate for these losses, but so far there are no sources of funding for it.
Kuyun pointed out that current global prices are not the only factor in pricing, but given the level of competition and the large number of gas stations, supply sources, and logistical capabilities in the Ukrainian market, in his opinion, there is no chance of operating under any rules other than market ones.
For his part, Volodymyr Omelchenko, director of energy and infrastructure programs at the Razumkov Center, noted that autogas is once again becoming more cost-effective than gasoline, having dropped by more than 5 UAH/liter in one month and more than 7 UAH/liter in two months.
Meanwhile, gasoline has dropped in price by only 1.1 UAH per liter over the past month. He noted that currently, a liter of LPG costs approximately 56% of the price of a liter of A-95.
Omelchenko attributed this, in particular, to a decline in the wholesale price of LPG, which fell by 3.46 UAH per liter over the past month.
According to him, propane and butane prices have fallen in Europe, and the import parity for LPG has also decreased since its April peak. As of June 19, it stood at 34.43 UAH per liter, compared to 40.95 UAH per liter on April 16.
However, he also noted that the price cap at gas stations is determined not only by European quotations but also by the influence of wholesale prices, logistics, taxes, exchange rates, security risks, and the safety margins of the networks themselves.
“Therefore, a decline in external prices does not always immediately translate into an equivalent decline at the retail level,” Omelchenko said.
As previously reported, fuel prices in Ukraine began to decline around mid-June amid reports of a stabilizing situation in the Middle East and falling oil prices.
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