How gasoline prices will rise if oil transit through Ukraine is stopped
8 January 12:11
The Verkhovna Rada has registered a draft law that proposes to ban the transit of Russian oil and gas through Ukraine during martial law. This proposal has caused a public outcry, as some experts and consumers fear that it could lead to higher fuel prices in Ukraine. However, fuel market expert and director of the consulting company A-95 Sergiy Kuyun in an exclusive commentary to "Komersant Ukrainian" said that this step will not have a significant impact on the cost of fuel for Ukrainians.
Mr. Kuyun explained that the termination of Russian oil transit will not affect gasoline and diesel prices in Ukraine.
“No, it will have absolutely no impact on our prices. Because this oil is sent for processing to the enterprises of Hungary and Slovakia, respectively,” the expert noted.
According to him, although Ukraine buys some oil products from these countries, their cost does not depend on the price of oil supplied through Ukrainian territory.
“We do have some small market share that we buy in Slovakia and Hungary. But those contracts are not tied to oil prices, they are tied to the quotations of petroleum products in Europe. Accordingly, this oil will not affect these prices in any way,” he added.
What are the prospects for the fuel market?
Regarding the general forecasts for the coming months, Sergiy Kuyun emphasizes that the situation on the fuel market remains unstable, as prices largely depend on global oil prices.
“It’s hard to talk about the quarter, because the situation is changing a lot. Recent events prove this once again. For example, since the beginning of the year, we have increased excise taxes on fuel, which was laid down in the relevant draft law in the summer. And there was hope that, in principle, there would be a small increase, about UAH 1.3 for liquefied gas, UAH 1.5 for gasoline, and UAH 2 for diesel fuel. It’s a tax, just a tax. And there was hope that we could pass this increase even unnoticed, but it did not happen,” the expert explained.
He also noted that already now Ukrainian traders have been forced to raise prices for gasoline, diesel fuel and liquefied gas by an average of 1-1.5 hryvnia.
“Why? Because we have faced a rise in global oil prices. Literally in the first week, there was a 5% increase in oil prices. And this has already, so to speak, canceled the prospect of going through this unnoticed. Because the total growth potential was about 2.5 hryvnia. This is already quite a lot, so traders could no longer keep prices up. And yesterday we saw the first stage of the increase, with prices for the entire fuel line rising by about UAH 1-1.5,” explained Kuyun.
Further price dynamics will depend on the situation on the global markets.
“Whether there will be further growth is still a question. I mean, this is something that was completely objective. This is something that is clear. Then, I think, the market will look at global prices. If they continue to grow, the price will also grow. So I can’t say that the price will definitely rise further, we’ll see,“ summarized Sergiy Kuyun.
