Fuel prices at gas stations will rise due to an increase in excise taxes: what you need to know.

Starting from September 1, 2024, the first phase of increased excise taxes has led to a rise in liquefied gas prices. However, the prices of gasoline and diesel fuel are also set to increase. According to information published in the "Inflation Report" by the National Bank of Ukraine for October 2024, the rise in fuel prices has significantly slowed down, reaching 6.0% year-on-year in September (compared to 25.5% year-on-year in June), which was below the expected level.

"At the same time, low oil prices and high stock levels at gas station networks, built up prior to the excise tax hike, have restrained the increase in gasoline and diesel prices. The comparative base effect caused by tax changes in July 2023 also had a dampening impact on prices," the report notes.

According to the NBU's forecast, the presence of significant fuel reserves will exert a short-term downward pressure on prices. As these reserves diminish and excise taxes increase, along with the effects of changes in the hryvnia exchange rate, fuel price growth is expected to accelerate to over 9% by the end of 2024, and will remain at a high level throughout most of 2025.

"Through cost channels, this will further pressure prices of certain goods and transportation services. However, the anticipated gradual decline in global oil prices will offset the further increase in excise burdens, and in the medium term, fuel price growth will slow down," the report states.

Previously, the Ministry of Economy reported on rising prices in Ukraine: four factors affecting inflation. In August 2024, Ukraine experienced a 0.6% increase in consumer prices compared to July, leading to an annual inflation rate of 7.5%.