Gasoline price reached new benchmark in Ukraine

Author : Olena Holubeva

Source :

On the beginning of September, a price rise for gasoline in Ukraine continues: over the weekend, the price of gasoline A-95 on the fuel stations reached mark of 30 UAH per liter
23:28, 20 December 2017

112 Agency

The price of A-95 gasoline in Ukraine for the first time exceeded the level of 30 UAH (1,08 USD)/ liter, reported Enkorr with reference to the A-95 Consulting Group monitoring of the retail market. A-95 gasoline price at OKKO and WOG gas networks over the weekend went up by 50 kopecks/liter - up to 30.49 UAH / liter, A-92 - up to 29.49 UAH / liter, diesel fuel - up to 27.99 UAH / liter. The average cost of A-92 and A-95 gasoline as of December 18th, according to A-95 Consulting Group data, increased by 11 kopecks/liter and 12 kopecks/liter, to 27.40 UAH / l and 28.14 UAH / l, respectively, writes Enkorr.

We recall, the increase of diesel fuel and gasoline costs in Ukraine continues since September 7th. From September 7th to December 18th, the average price of A-92 gasoline has risen by 3.49 UAH / l, A-95 - by 3.49 UAH / l, A95+ - by 3.46 UAH / l, and diesel added 3.92 UAH / l. The main reason for the price change until recently was oil quotes. The current price increase is associated with a sharp weakening of the hryvnia exchange rate against major world currencies, which occurred last week, said Serhiy Kuyun, the director of Consulting Group. "The rate is growing, the price is also growing," he said. As it was already repeatedly reported, in Ukraine the market for auto fuel is import-dependent: there are only two domestic refineries that cannot drastically affect the price situation. At the same time, importers are forced to hedge the risks of further weakening of hryvnia, including them in a final price.

Note that over the past week Ukrainian hryvnia has fallen in price by 50 kopecks. The dollar on Ukrainian exchange reached the level of 28 UAH, and Euro - 33 UAH. The rate of the NBU is somewhat different. But even in accordance with its forecast for December 18th, the dollar went up by 22 kopecks and costs now 27.63 UAH. The euro went up by 16 kopecks. - up to 32.62 UAH. The National Bank said that there was no reason to worry. In comments to the 112 Ukraine TV channel, a director of an open market department of the NBU Serhiy Ponomarenko said that the depreciation of hryvnia was expected and was seasonal. According to him, the situation will soon stabilize.

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At the same time, experts do not share such optimism. In particular, the financial expert of the Reanimation package of reforms, Ruslan Chorny, commented to the 24 channel that he believed that the average exchange rate calculated by the government in 2018 budget was justified, and in 2018 dollar would reach the level of 29.3 hryvnias. The exchange rate, in particular, would continue to be pressured because of the situation with the deferred International Monetary Fund (IMF) tranche. By the way, this was not denied in the National Bank. "There are no fundamental reasons for devaluation for today, but there are psychological factors, and an absence of cooperation with the IMF is one of them," deputy head of the NBU, Dmytro  Solohub, said at a news conference about the exchange rate situation. Earlier in the report, the NBU stated that "a prolonged delay in obtaining by Ukraine next tranche from the IMF is the main risk for financial stability."

As reported, the IMF decided not to send a mission to review the cooperation program in January because of Ukraine's failure to comply with the requirement to establish an Anti-Corruption Court. At least, this reason was called by the Finance Minister Olexander Danyliuk. The National Bank recently announced that they expected to receive the next tranche from the IMF not earlier than in the second quarter of 2018. But earlier it was expected that it could be obtained by the end of 2018.

Due to the situation described above, the price of the auto fuel will continue to depend directly on the exchange rate. "Tell me what the exchange rate is, I'll tell you how much petrol costs," said to Serhiy Kuyun in response to a request to forecast the price. Expert Serhiy Sapegin said that every 10 cents of losses in the exchange rate will give an increase of 8 cents in price per liter of fuel.

It should be noted that in the current situation, sellers of the fuel remain in a favorable position. Despite the high demand, the prices for it even slightly decreased. Over the past week, the autogas in wholesale fell by 300 UAH / t - up to 20 600 UAH / t, according to "A-95 Group". In retail, it was sold at a much lower price now than in summer - an average of 12.71 UAH / liter.

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