On March 19, in Kyiv, a professional discussion titled “Fuel Prices and Competition: How Tax Policy is Changing Ukraine’s Fuel Market” was held, organized by the Fuel and Energy Business Association (FEBA).
The event was attended by Member of Parliament Dmytro Razumkov, leading fuel market experts and economists — Volodymyr Omelchenko, Hennadiy Riabtsev, Serhiy Sapyegin, and Leonid Kosyanchuk — as well as representatives of small and medium-sized fuel businesses.
Participants reached a consensus that the problem of fuel prices in Ukraine is rooted in both external and internal factors. Despite the influence of global markets and geopolitics, the market structure, competition levels, and state tax policyplay a crucial role. In today’s environment, the price of fuel is not merely an industry metric but a vital factor for the country’s economic resilience.
Tetiana Dumenkova (Deputy Head of FEBA) noted that the Ukrainian fuel market is currently undergoing deformation. She emphasized that fuel prices impact the entire economy—from logistics to the cost of food—while the market itself is gradually moving toward concentration. She highlighted that SMEs play a critical role as a “safety valve” that keeps prices in check, whereas the current mechanism of advance tax payments ignores actual business volumes and displaces independent operators.
Dmytro Razumkov (MP, Chairman of the Verkhovna Rada 2019-2021) stressed that the state should not “kill” those who fill the budget.
He stated that the current tax model is punitive rather than fair, creating unequal conditions and harming both market development and budget revenues.
Volodymyr Omelchenko (Director of Energy Programs at the Razumkov Center) pointed out that the market demonstrates systematic price synchronicity. Analysis shows a price correlation coefficient exceeding 0.9, indicating signs of an oligopoly.
He called for systemic changes to support the middle segment and discount operators.
Hennadiy Riabtsev (Chief Researcher at the National Institute for Strategic Studies) underscored that prices are formed based on expectations of future risks.
The market acts proactively, with prices reacting significantly faster to rising external factors than to their decline, highlighting a lack of transparent pricing.
Serhiy Sapyegin (Chairman of the Committee on Economic Competition at the UCCI) focused on the fact that the key risk today is not a fuel shortage, but its economic affordability.
Even with sufficient resources, consumers remain vulnerable if prices are too high.
Leonid Kosyanchuk (Market Expert) noted that the cashback mechanism does not affect price formation; it only partially compensates expenses.
This approach may actually strengthen large retail chains and displace the lower-priced segment.
The Business View: Inequality Under “Equal” Rules
Business representatives emphasized that applying the same rules to different operating conditions effectively creates inequality. Specifically, advance tax payments create a critical burden for regional gas stations and enterprises in frontline territories. This leads to station closures, reduced fuel accessibility, and higher prices for consumers.
The Resolution and Next Steps
The discussion concluded that ensuring competition and fair rules is the primary way to protect consumer interests. Consequently, the Fuel and Energy Business Association is preparing a formal resolution that includes:
- A revision of the advance corporate income tax mechanism, including differentiation based on business volumes and regional specifics.
- Improved tax administration approaches.
- A proposal to consider the full cancellation of advance payments during the price stabilization period.
This document will be submitted to the relevant committee of the Verkhovna Rada, the Cabinet of Ministers, and other key state authorities.
