Without VAT and excise: how much will gasoline cost in Ukraine now

In Ukraine, the value added tax and excise tax on fuel in our state will be canceled. This will help avoid shortages and stabilize prices.

President of Ukraine Volodymyr Zelensky spoke about this today, March 12, during a new video message to Ukrainians.

According to Zelensky, the decision to abolish VAT and excise duty on fuel has already been approved by the government. Then it’s up to the deputies of the Verkhovna Rada.

As Deputy Prime Minister, Minister of Economy Yulia Sviridenko said earlier, in Ukraine they will change the formula for calculating the marginal price of gasoline so that it becomes profitable for gas stations to sell fuel again.

Yes, the maximum allowed price for gas stations can include additional costs that have arisen after the reorientation of supplies from Belarus and Russia to Poland, Romania and Hungary.

The Cabinet of Ministers assumes that this will become a motivation for gas stations to import and sell more fuel, because it was already unprofitable to do this according to the old formula.

In order to avoid too strong a rise in prices for buyers, the Cabinet of Ministers sent to the Rada a bill to reduce the tax burden for fuel sellers. The VAT rate will be reduced from 20% to 7%, and the excise duty will be abolished.

Both decisions will take effect at the same time.

While the size of the allowed price does not grow. It will remain at the level set a few days before the start of the Russian invasion:

• 4.55 UAH/liter of gasoline;
• 5 UAH per liter of diesel.

Limitation do not apply to “premium” brands fuel – they can be sold at any market price.

Fuel shortage in Ukraine

So far, Ukraine still feels a shortage of fuel. Gas station networks are recovering from the shock of the war and are trying to resume work.

Now the situation is changing every minute, so some gas stations may not work, OKKO network reported. The priority is to provide fuel for cars of special services and critical infrastructure. For example, WOG stations serve such vehicles without a queue.

It is difficult for Ukraine to provide yourself completely fuel of own production.

As Alexander Sirenko, an analyst at Naftorinok, told Segodnya, only one of the six existing plants is currently operating, which provides 50% of the demand.

Despite the rejection of Belarusian and Russian imports, gas stations continue to comply with marginal fuel prices.