No one wants to sell fuel for 90-100 UAH per liter, but will prices go down?
Today, April 8, there is a significant price difference in the Ukrainian fuel market depending on the chosen gas station network, however, global news has already prompted major players to reconsider their prices downward.
Why does each gas station network have its own fuel prices and should we expect a decrease, – RBC-Ukraine asked fuel expert, director of “Consulting Group A-95” Sergey Kuyun.
Also read: Millions on fuel. Who really profits from cashback – the state, businesses, or Ukrainians
Main points:
- Oil price crash: Following the announcement of a ceasefire between the US and Iran, global prices for Brent oil fell by more than 16%. The Cabinet expects a corresponding decrease at Ukrainian gas stations.
- First price reductions: Networks OKKO, WOG, and “Ukrnafta” have already lowered the price of diesel by 1 hryvnia. But this is more of an emotional reaction.
- Why prices differ by 7 hryvnias: The huge price gap between gas stations is due to personnel costs, quality control, and tax payments.
- April forecast: The threat of prices rising to 100 UAH per liter has passed. If global quotes remain stable, fuel prices in Ukraine will gradually decrease as new, cheaper batches are imported.
Global context: oil crash
The main factor for the changes has been international politics. After US President Donald Trump announced a ceasefire between the US and Iran, Brent oil quotes fell by 16.08% this morning – to $91.7 per barrel.
Ukrainian Prime Minister Yulia Svyrydenko stated after a meeting with the head of “Naftogaz” that she expects a response from Ukrainian gas stations regarding price reductions.
“The state network of gas stations ‘Ukrnafta’ has already responded and started lowering prices. If the current global dynamics persist, a more significant decrease is expected,” – she wrote.
As fuel expert Sergey Kuyun explained in a comment to RBC-Ukraine, the market has received this news with great hope, as “no one wants to sell fuel for 90-100 UAH per liter,” since people simply stop buying fuel.
However, the expert warns against excessive optimism: the current decrease is more of a “emotional” market reaction and expectations, rather than economic calculation. In reality, there are no real grounds for such low prices yet, because the fuel currently at gas stations was purchased at yesterday’s high prices.
A gap of 7 hryvnias: why is there such a big difference between gas station prices
As the market adapts, the difference between major networks (WOG, OKKO) and smaller segments (BRSM, AMIC) remains enormous – more than 7 UAH per liter.
How much fuel costs at the most popular gas stations (Infographic RBC-Ukraine)
That is, on a full tank of gasoline (50 liters) one can save an average of 355 hryvnias today (for example, if WOG sells gasoline for 77 UAH, while “Ukrnafta” and BRSM offer it for 69.90-69.94 UAH).
Expert Sergey Kuyun highlights several reasons for this price gap:
- Number of staff: In large networks (OKKO, WOG), 20-25 people work at one station, while discount chains (AMIC and others) have up to 10. Salary expenses are directly included in the cost per liter.
- Quality control: Large networks maintain their own expensive laboratory complexes, staff, and special transport for regular fuel checks.
- Marketing component: The price of premium networks includes marketing and discount system costs (which could previously amount to 3-4 UAH per liter).
- Taxes and transparency: Not all networks have the same tax discipline. The use of schemes to evade tax payments (VAT, excise) allows for artificially lowering prices.
- Shortfills: One reason for suspiciously low prices may be simple shortfills of fuel (for example, actually dispensing 950 ml instead of 1 liter).
- Counterfeit: Selling fuel of questionable quality or without paying excise taxes allows networks to significantly increase their competitiveness through dumping.
Will fuel prices decrease? What should drivers expect in April
After news of the oil price crash and Svyrydenko’s announcement, in the afternoon, major networks did revise their prices: OKKO, WOG, and “Ukrnafta” lowered the cost of diesel by 1 hryvnia.
According to Kuyun, the fact that “Ukrnafta” was the first to lower prices today forced others to “catch up.”
But there is a painful nuance for traders. The government urged to buy as much fuel as possible to avoid shortages, and companies imported record volumes at March’s “astronomical” prices. Now, with the oil crash, those who bought expensive tankers the day before yesterday find themselves on the brink of bankruptcy, the expert explained.
Director of Consulting Group “A-95” Sergey Kuyun notes that if the global dynamics remain, further price reductions are expected. The situation with fuel availability is stable.
The minimum program for April is for prices to stop rising; the maximum program is for prices to stabilize now.
“Because 100 hryvnias per liter of diesel is not a scare tactic or a joke, it was an absolutely real prospect until yesterday. Until today, it was absolutely real, and companies were heading towards it, and the government was aware of this. I think that now this process, if it doesn’t stop, will significantly slow down,” – says Kuyun.
The expert expects that the market will gradually decrease: the cheap fuel that is coming in now will slowly displace the expensive stocks accumulated in March.
The main thing is that the trend on global exchanges remains stable.
Also read:
- Diesel already at 97 hryvnias per liter: how prices at gas stations changed on April 8
- Gas station prices are going down. Svyrydenko expects fair pricing from gas stations
Source: rbc.ua +rel=”nofollow”
