Rada has approved an increase in excise taxes on fuel. What will happen to diesel and gasoline prices?

On July 18, MPs voted for law 11256-2 which provides for the establishment of new excise tax rates on fuel (to bring them in line with the minimum set in the EU).

Thus, starting from September 1, fuel excise taxes will increase by 14-217% and will continue to grow annually until 2028.

According to the Association Ukravtoprom, the current excise tax rate for gasoline is €213.5 per 1000 liters, for diesel — €139.5, and for autogas — €52. Whereas the provisions of the European norms provide for minimum excise tax rates of €359 per 1000 liters of gasoline, €330 per 1000 liters of diesel fuel and €68 per 1000 liters of liquefied gas (interestingly, in the amendments to the second reading, the rate for liquefied gas is, for some reason, indicated at €250 per 1000 liters)

According to the think tank Tax Foundation (as of mid-2023), the lowest excise taxes are currently in Bulgaria, Hungary, Romania, Malta, and Poland, and the highest in Germany (€670/1000 liters of gasoline and €490/1000 liters of diesel fuel).

Forbes has calculated the price increase for fuel based on the excise tax increase (excluding changes in oil prices, exchange rate and demand) starting in September:

• gasoline — by UAH 1.5/l;
• diesel fuel — by 2 UAH/liter;
• autogas — by UAH 6.

The Ministry of Finance noted that the implementation of the draft law will provide additional revenues to the state budget in the second half of 2024:

• from fuel sales — by UAH 1.6 billion on average per month. This included UAH 1.3 billion from excise tax and UAH 292 million from value added tax;
• UAH 4.5 million per month from excise tax on sales of intermediate products.