Photo: Prices at petrol stations began to fall significantly in March (Getty Images) Author: Dmitry Sidorov
Ukrainian petrol station networks have started to reduce prices for petrol, diesel fuel and autogas since mid-March. There is still significant potential for cost reduction, but tax risks and falling sales stand in the way .
For more information on the situation with prices at petrol stations, see the RBC-Ukraine article.
“Oil has fallen, they (gas station chains – ed.) should have reduced the price, but they are afraid that something else will happen and the retail business will lose significantly. Mathematics shows that it is possible to move (reduce the price – ed.), but economics shows that there is no need to rush,” says Alexander Sirenko, an analyst at the consulting company “Neftorynok”.
According to him, during March 13-20, average prices for gasoline and diesel fuel in the Ukrainian gas station networks fell by 58 kopecks – 1 hryvnia per liter to 55.71 hryvnia per liter of A-95 gasoline and 54.06 hryvnia per liter of diesel fuel. Over the same period, autogas fell in price by an average of 28 kopecks per liter – to 36.32 hryvnia per liter.
According to Bloomberg, prices for benchmark Brent crude oil futures fell by 12% from $82 to $72 per barrel between January 15 and March 20, 2025.
How much cheaper can fuel become?
Oleksandr Sirenko added that against the backdrop of a 10% or more reduction in oil prices, the price of fuel has the overall potential to decrease by 5 hryvnia per liter .
“A price reduction of 0.5-1 hryvnia per liter is just the beginning. Oil has fallen by 10%, which means that we can expect a reduction of about 5 hryvnia per liter in gasoline or diesel,” he said.
The expert added that as of March 20, the average wholesale price of diesel fuel (when shipped by tanker from an oil depot) in Kyiv and Kyiv region was UAH 45.9 per liter, while the retail price at gas stations was UAH 54.57 per liter. The difference between the wholesale and retail segments is UAH 8.6 per liter, which indicates significant potential for further price reduction at gas stations.
Problems of fuel companies
However, noted Alexander Sirenko, further price reductions are being held back by the risks of the fuel business, namely a significant drop in sales volumes due to a decrease in the population and its level of mobility.
“Gas station networks have a big problem – sales are falling sharply, precisely because of the war. There are fewer people, people are being killed, people are fighting, people are avoiding unnecessary movements because of mobilization, people continue to leave the country,” he said, explaining that with the decrease in the amount of fuel sold, companies must earn more on each liter in order to cover their ongoing costs.
Another important risk for the fuel business was the increase in excise tax on petroleum products, which occurred twice in the last six months – in September 2024 and in January 2025.
In addition, from December 1, 2024, a provision of the Tax Code came into effect that obliges gas station networks to pay income tax in advance (60 thousand hryvnia from one station). Such changes in tax legislation, according to Oleksandr Sirenko, also add uncertainty to fuel traders regarding further price reductions.
“That's why they play marketing with promotions. Over the past six months, there have been 6-7 “black” Fridays, this has never happened before. It is also common practice to reduce prices on weekends,” the expert commented, adding that such steps allow attracting customers by partially or temporarily reducing the price.
As reported by RBC-Ukraine, according to the monitoring data of the “Consulting Group A-95” during February, prices for gasoline, diesel and autogas in the network of gas stations decreased slightly (on average by 2-19 kopecks per liter). As of February 28, the average retail price for gasoline A-95 was 56.91 hryvnia per liter, for diesel fuel – 55.3 hryvnia per liter and for autogas – 36.98 hryvnia per liter.
At the end of February, the director of the “Consulting Group A-95” Sergey Kuyun in a commentary to RBC-Ukraine gave a forecast about the potential for a decrease in prices for petroleum products in March, especially gasoline and diesel fuel. According to him, the networks faced the problem of low fuel sales, therefore, in order to stimulate sales, they may go for a price reduction.