The Federation of Trade Unions of Ukraine warned of the negative impact of Ukrzaliznytsia's fare hikes on the economy
The business community is warning of risks to industry and GDP. According to the Federation of Employers of Ukraine, Ukrzaliznytsia’s new fare initiative could lead to a decline in production in strategic sectors, a drop in tax revenues, and a negative impact on economic growth.
RBC-Ukraine reports this, citing a letter from the Federation of Employers that the FEU sent to the government.
The Federation emphasizes that Ukrainian industry is currently operating at full capacity due to electricity shortages, security risks, and complex logistics—production volumes have already fallen by 30–35% compared to pre-war levels.
Another round of tariff hikes (which could exceed 40–45%) will finally undermine exporters’ competitiveness.
Critical reduction in freight volume. UZ’s freight volumes have already fallen by nearly half—from 300 million tons to about 160 million tons in 2026. The new price hike will force businesses to switch to road transport.
Cross-subsidization. Freight shippers are effectively forced to cover the chronic losses of the passenger sector, which could exceed 25 billion UAH this year.
An alternative to reforms. The FRU is convinced that UZ management is using tariff pressure instead of genuinely optimizing costs and improving labor productivity.
“The increase in freight tariffs is being used as an alternative to improving labor productivity and optimizing costs at Ukrzaliznytsia,” the FRU emphasizes.
According to preliminary estimates by experts, even with a 37% increase in tariffs, Ukraine’s economy will suffer a serious blow. If the figure exceeds 40%, the consequences will be even more critical:
- a reduction in Ukraine’s GDP by at least 96–100 billion UAH
- a significant decline in foreign exchange earnings due to a drop in exports
- a decrease in tax revenues to budgets at all levels.
To save Ukrainian industry from stagnation, the Federation of Ukrainian Railways (FUR) is calling on the government to freeze freight rail transport rates in 2026. In addition to imposing a moratorium, the business community proposes implementing two systemic measures to stabilize the situation.
First, it is necessary to ensure full coverage of losses from passenger transportation at the expense of the state budget. The 16 billion UAH allocated for this year is critically insufficient, so government officials must find additional funding and develop a clear mechanism to support the sector for 2027.
Second, the FRU believes that the efforts of Ukrzaliznytsia’s management should be directed toward internal reforms. In particular, the state-owned company’s leadership must focus on reducing the carrier’s own costs and actively expanding its freight base to attract new customers.
It should be noted that earlier, Yulia Sirko, First Deputy Chair of the Verkhovna Rada Committee on Transport and Infrastructure, also stated the need to change Ukrzaliznytsia’s business model. According to her, simply raising fares only exacerbates the state-owned company’s financial problems due to the loss of freight traffic.
As a reminder, Ukrzaliznytsiais launching the purchase of commuter tickets via an app throughout Ukraine.
Ukrzaliznytsiais deploying over 800 mobile shelters across the country.
