Fuel Demand Surge in Ukraine: Expert Asserts Market Remains Under Control

The State of Ukraine's Fuel Market

According to ХВИЛЯ: While a surge in fuel demand has caused concern among Ukrainian consumers, Serhiy Kuyun, director of the A-95 Consulting Group, maintains the situation is manageable. Despite a significant spike in demand in January 2024, the market is not in a critical state. Kuyun highlighted that fuel sales at filling stations jumped by 25-40% compared to the same period in 2023. Ukraine's energy market has faced significant challenges since the full-scale invasion, adapting to disruptions in supply chains.

Import Levels and Market Competition

In December 2023, Ukraine imported a record volume of diesel fuel-over 800,000 tons. This milestone was achieved after a major operator began supplying fuel from Spain. Kuyun also noted that no single filling station network controls more than 8% of the market, indicating a healthy competitive environment. On some stretches of highway, such as near Zhytomyr, the density reaches as high as ten stations per two kilometers.

Serhiy Kuyun pointed out that the market situation is further complicated by rising global oil prices, as approximately 50% of the world's oil passes through the Strait of Hormuz. He observed that while fuel prices have risen by several hryvnias, this is due to higher purchase costs rather than a crisis.

"Since we buy fuel on the global market, we are forced to react to these changes. But to speak of a tragic price increase is, to put it mildly, an exaggeration," the expert emphasized.

Furthermore, Kuyun stated that the only real problem consumers faced during the winter was diesel fuel freezing in extreme frosts below -20 degrees Celsius. Overall, the expert refuted claims of a critical market situation, asking:

"Where do such conclusions come from? What crisis are they talking about? Frankly, it's hard for me to understand."

The Ukrainian fuel market, characterized by heightened demand and record diesel imports, demonstrates the market's adaptation to changing conditions. Competition among filling stations remains intense, which helps stabilize prices. Rising global oil prices and other factors, such as extreme weather, do impact the market. However, experts assure that no critical situation currently exists. This perspective is important for consumers who may be alarmed by news reports of price hikes and potential shortages.