Two Major Factors Behind Ukraine's Rising Fuel Costs in Early 2026
Ukraine is bracing for an increase in fuel prices, driven primarily by the depreciation of the hryvnia and rising global oil prices. At the start of 2026, the hryvnia's exchange rate began to decline, significantly impacting the fuel market. According to expert Serhiy Kuyun, the slide in the currency's value is a critical component in setting prices for petroleum products:
'Every one-hryvnia change in the exchange rate translates to roughly 90 kopiyoks in the final cost of petroleum products.' Serhiy Kuyun
While global oil prices dropped to $60 per barrel in December 2025—a factor that would normally curb price hikes—a scheduled increase in excise taxes that same month did not lead to a significant immediate rise in fuel costs. The excise tax on diesel rose by 2.25 UAH per liter, on gasoline by 1.75 UAH, and on liquefied gas by 1.5 UAH per liter. However, by early 2026, global oil prices had climbed to $65 per barrel, adding further upward pressure on costs. This price volatility is a common feature of global energy markets, often influenced by geopolitical and economic factors.
Wholesale gasoline prices have already increased by 2 UAH, with the combined effect of currency devaluation and global oil prices adding approximately 2.5 UAH to fuel production costs. Demand for fuel from owners of power generators is also growing, estimated at 70,000 to 80,000 tons per month, which accounts for about 10% of the market.
Serhiy Kuyun notes that despite this rising demand,
'if we're asking whether this affects prices in any way, the answer is no, because we can import significantly more fuel.'
Conclusion
Consequently, Ukraine's fuel market is once again facing pressures likely to result in higher prices for consumers. The increase in fuel costs at the start of 2026 reflects a complex economic situation tied to the hryvnia's devaluation and instability in global oil markets. These factors affect not only the price at the pump but also broader inflation and the country's overall economic stability.
Monitoring developments in the global oil market and on the currency exchange will be crucial for predicting future price changes in Ukraine's fuel sector.