A Changing Market: Who Profits and Who Struggles to Survive? Retail fuel trade in Ukraine is undergoing significant transformations. Just a few years ago, local and regional gas station networks played a substantial role in the market, but their influence has been gradually declining.
According to an analytical study conducted by the Fuel and Energy Business Association, the market has been nearly evenly divided between major players and small and medium-sized businesses: 50.3% of revenues are concentrated among 17 large companies, while 49.7% remain with other operators.
Despite this balance, the current dynamics indicate a gradual strengthening of large networks due to tax changes, pricing mechanisms, and increasing competition. What will be the consequences of this process for consumers, entrepreneurs, and the industry as a whole? Read more in our article on “UKRINFORM“.
Small and Medium Businesses Under Pressure from Multiple Factors
- Advance Tax: A Blow to Local Gas Station Networks
One of the most significant factors that has severely weakened regional gas stations is the mandatory advance payment of corporate tax.
The amount of this payment depends on the type of fuel sold:
• UAH 30,000/month – if the gas station sells only liquefied gas.
• UAH 45,000/month – if more than 50% of sales come from gas.
• UAH 60,000/month – for all other gas stations.
According to the Association’s research, in December-January, the state collected UAH 586 million in advance payments, but over 70 businesses were unable to meet the requirement. As a result, in just the first months of 2025, the number of active fuel trading licenses dropped by 7.8%.
It is worth noting that before this mechanism was introduced, only three companies paid taxes at such levels. This once again underscores that the new tax burden has significantly complicated operations for small and medium-sized businesses.
- Competition That Pushes Out Local Networks
Large market operators have not only maintained but also strengthened their positions through flexible pricing mechanisms, marketing promotions, and partnership programs.
Small and medium-sized businesses cannot compete with companies that purchase fuel in bulk and receive more favorable procurement prices. As a result, many regional gas stations are forced to operate on minimal profit margins or shut down entirely.
- The Shadow Market: Illegal Gas Stations as a Consequence of Strict Regulations
The decline in the number of legal small gas stations does not mean that the fuel market is shrinking. On the contrary, the share of the illegal market is growing, creating unequal competition.
According to the Association, 10% of gas stations in Ukraine operate with violations or without licenses altogether. This means that legal operators pay all taxes and bear financial risks, while shadow businesses generate profits without proper taxation to support state development.
The expansion of the shadow market is a direct response to excessive tax burdens. Small businesses that cannot withstand the financial pressure either shut down or move into the “gray” economy.
What’s Next? Forecasts for Small and Medium Businesses
The current market model leaves little room for local networks to maintain their positions. If tax policies do not change and no support mechanisms for regional gas stations are introduced, the trend of pushing out small players will continue.
Tetyana Dumenkova, Deputy Head of the Fuel and Energy Business Association, notes: “The current regulatory framework does not create equal competitive conditions for all market participants. Local networks have to compete not only with large operators but also with the illegal market, which operates without paying taxes. If the government does not introduce a more flexible policy to support small and medium businesses, we risk losing most regional gas stations in the coming years.”
Possible Strategies to Save SMEs in the Fuel Retail Sector
To ensure the survival of small and medium-sized businesses, the following steps are crucial:
• Tax system reforms – including a review of the advance corporate tax for gas stations.
• Stronger efforts to combat the shadow market – eliminating unfair advantages of illegal sellers.
• Cooperation between small networks – joint fuel procurement to reduce costs.
• Diversification of services – transforming gas stations into multi-functional complexes that offer more than just fuel.
2025 Will Be a Defining Year for SMEs in the Fuel Market
If the regulatory environment remains unchanged, Ukraine will face an even more monopolized fuel market, dominated by just a handful of major companies—while local gas station networks fade into history.