Drivers in Ukraine are facing an inevitable rise in the price of automotive fuel. In the near future, the cost of gasoline and diesel at gas stations may increase by at least 5 hryvnias per liter. This forecast was given by fuel expert and director of the consulting group «A-95», Serhiy Kuyun, in a comment to RBC-Ukraine.

Economic imbalance: wholesale prices exceed retail prices

The situation in the fuel and lubricants market has reached a critical point. Currently, a paradox has emerged where wholesale purchase prices for diesel fuel already exceed the price at which it is sold to the end consumer at gas stations. Fuel that companies are purchasing now at world market rates costs more than its current price at the pumps.

Previously, in past years, the difference between wholesale and retail prices was around 8–10 hryvnias per liter. It is precisely this gap that represents the potential for price growth. According to Kuyun, the current market conjuncture makes a price increase of 5 hryvnias a settled matter.

«This will happen one way or another, because purchases are already being made at high prices above current retail levels», — the expert emphasized.

Timing and dynamics of the increase

The new cost will be fully reflected on gas station price tags in approximately 2–3 weeks. This is the amount of time required for batches of fuel purchased at inflated prices to arrive in Ukraine and be sold.

The expert reassures that the price increase will occur gradually, without sharp shocks for consumers. This is because global energy prices have been rising gradually, not in jumps.

Who will raise prices first?

The market reaction will be uneven. Gas stations in the economy segment will be the first to revise their price tags. Such networks have the lowest margin and lack significant fuel reserves, forcing them to react instantly to rising costs.

Major fuel networks will raise prices last. This is due to their having a buffer of strength and large stockpiles, which have allowed them to maintain stable prices over the past two weeks.

«Right now we see that the rise in global prices has been going on for two weeks (if not longer), while the price at the pumps has not risen. Reserves have been working all this time. But they are not limitless; no one holds them for more than two weeks. This reserve has already been used up», — added Serhiy Kuyun.