The largest petrol station chains in Ukraine have once again raised their prices for diesel fuel. Over the last few days, the price has risen by 1–2 UAH or more per litre, depending on the chain, whilst premium diesel has approached 99 UAH at some stations. The market is being affected by high European fuel prices, logistical difficulties and seasonal demand.
Briefly about the main points
- The price of diesel at large petrol stations has risen by 1–2 UAH or more.
- Premium petrol prices have approached the 99 UAH per litre mark.
- Petrol is rising in price more slowly than diesel and LPG.
- A European shortage and more expensive imports are putting pressure on retail prices.
- Further price adjustments may be made in the coming weeks.
Diesel is outpacing petrol in terms of price rises
Operators of major petrol station chains have once again updated their price lists. At most of them, petrol prices have either remained unchanged or risen only slightly, whilst diesel has become 1–2 UAH per litre more expensive, and at some chains — by more than 2 UAH.
Automotive gas is also one of the segments where price rises have been most noticeable. The most expensive diesel prices have now approached the psychological threshold of 99 UAH per litre, which has become a new record high for the Ukrainian market.
At the end of July, a fuel expert Sergey Kuyun estimated the average retail price the price of diesel fuel at 88 UAH per litre following a weekly increase of 9.34 UAH. This average figure is consistent with the significantly higher prices in the premium segment, where retail chains have a different cost and procurement structure.
The European shortage and seasonal demand are adding to the pressure
Retail prices in Ukraine are influenced not only by oil prices, but also by the cost of finished diesel in Europe, exchange rates, taxes and logistics. Industry calculations in mid-July showed that the wholesale price of diesel had exceeded the average retail price, whilst import parity had risen sharply. This may mean that the buffer to keep prices in check has been reduced for some retail chains.
The situation is exacerbated by a shortage of diesel in Europe. The ban on diesel exports from Russia has intensified global supply pressures and pushed up European gas oil prices. For Ukraine, this means more expensive imported fuel.
The harvest is driving additional demand, freight transport and summer travel. Russian attacks on fuel infrastructure are also forcing operators to factor in additional risks and costs. At the end of July, Dmytro Lyushkin, founder of the Prime Group of Companies, predicted that diesel prices would rise to 99 UAH per litre in August, describing 100 UAH as primarily a psychological threshold.
The consequences go beyond the costs incurred by drivers
Further rises in diesel prices are increasing drivers’ costs directly at the pump. For businesses, freight logistics, the operation of agricultural machinery and other fuel-dependent operations are becoming more expensive.
This increases the risk of further pressure on transport and production costs. However, this does not mean that all goods will automatically become more expensive by the same amount: the impact on final prices will depend on the proportion of fuel in production costs, companies’ stock levels and the supply situation.
