Ukrzaliznytsia's fare hikes will drive up gasoline and diesel prices
An increase in Ukrzaliznytsia’s freight rates could affect fuel prices in Ukraine due to higher logistics costs. According to Oleksandr Sirenko, an analyst at the consulting firm “Naftorink,” the transportation component of fuel costs could rise from approximately 2–3 hryvnias per liter to 4–5 hryvnias per liter.
He noted that the transportation component is one of the key elements of the fuel price, so any increase in transportation costs is inevitably reflected in the final price for the consumer.
“Logistics costs definitely affect delivery costs. Whereas the average logistics component used to be around 2–3 hryvnias per liter, we’re now heading toward 4–5 hryvnias. We’ll have to do the math, but it’s clear that it will be higher than before,” Sirenko noted.
According to the expert, the Ukrainian market is already under pressure from external factors: following the escalation of the situation in the Middle East, demand for petroleum products—primarily diesel fuel—has risen in Europe, leading to a significant increase in the price differential between crude oil and finished diesel.
“Crude oil has been getting cheaper for several days now, but diesel fuel isn’t responding to this decline. This is an abnormal situation. Ukraine doesn’t have its own production at the necessary volumes, so it’s forced to buy expensive imported fuel,” explained Sirenko.
The expert also noted that rising fuel prices will affect not only motorists but also the cost of transportation, agricultural production, and food prices. In his opinion, the government could alleviate the price pressure, but this would require prompt decisions by the Cabinet of Ministers.
Source: Glavkom
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