Fuel Prices in Ukraine: Over Half the Cost is Taxes, Says Business Leader

Defending Fuel Station Operators

According to Главком: Vladimir Popereshnyuk, co-owner of the 'Nova Poshta' company, has come to the defense of fuel station operators, who are often accused of unjustifiably raising fuel prices. He emphasized that taxes constitute more than 50% of the final fuel price, a major factor in its cost. Popereshnyuk detailed that this tax burden includes:

• Excise tax
• Value-added tax (VAT)
• Corporate income tax
• Payroll taxes

Market Structure and State Regulation

Popereshnyuk pointed out that both the retail and wholesale fuel markets are licensed, creating barriers for new entrants. He argues that the state artificially limits competition, which negatively impacts prices and service quality. He believes that without such strict regulation, the number of market participants would be significantly higher, leading to better service and more competitive pricing.

As of the morning of March 6, Popereshnyuk noted that no further fuel price increases had been recorded, and there were no significant queues at stations in the capital, Kyiv. This suggests the market situation remains stable despite the ongoing accusations against retailers.

“The primary influence on fuel prices is taxes, which make up over 50% of the cost. Yet we don't hear accusations against those who set these taxes or calls to reduce the tax pressure on prices.” – Vladimir Popereshnyuk

Popereshnyuk also remarked that it is crucial not to view entrepreneurs as enemies and the state as a protector. He compared the situation to Ayn Rand's novel 'Atlas Shrugged,' stressing that society should not confuse good and evil.

He further highlighted that modern fuel stations are no longer just places to refuel; they offer diverse services like restaurants, convenience stores, restrooms, charging stations, and relaxation areas. This demonstrates intense competition among companies striving to lower prices and improve customer service. “I know this because we work with them, negotiate, buy fuel from them, and fight for every hryvnia,” he concluded.

Vladimir Popereshnyuk's statements underscore the importance of understanding the structure of fuel prices, particularly the role of taxes. High fuel costs directly impact the price of goods and services for consumers. His comments on restricted competition in the fuel retail market raise questions about the need to review state regulation, which could potentially benefit both businesses and consumers in the sector.