Why fuel prices are rising — expert names the reasons
12 March 18:40
The Ukrainian petroleum products market is almost 100% dependent on imports, so any price increase on the European market automatically affects the cost of fuel in Ukraine. This was stated by Mykhailo Gonchar, an expert on international energy and security relations, in an interview with the YouTube channel "Komersant Ukrainian".
According to the expert, after the destruction of the Kremenchug oil refinery, Ukraine lost the ability to process oil within the country. As a result, Ukraine imports the finished product.
“We are dependent on the global oil market because we do not refine oil at all now. We have nowhere to refine it after the only functioning oil refinery in our country, in Kremenchuk, was destroyed last summer,” he said.
According to the expert, most of the gasoline and diesel comes from the European market, so changes in wholesale prices there automatically affect the cost of fuel for Ukrainian consumers.
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“In other words, we are now practically living on 100% imports. And in this context, of course, we are automatically dependent on the market situation, primarily the European oil products market, from where the main supplies come,” he said.
Gonchar also explained that administrative restraint on fuel prices could have the opposite effect and provoke a shortage of the product on the market.
“Hypothetically, we could develop safeguards such as price caps. But this step is dangerous. Why? Because then there will be a shortage on the market,” the expert said.
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