By the end of the week, the price of diesel fuel at filling stations may rise to 80 UAH/liter from the current 70-74 UAH/liter, and there are prerequisites for further growth to 90 UAH/liter, while gasoline will rise slightly in price, according to Sergey Kuyun, director of the consulting company A-95.
“Over the weekend, diesel fuel began to arrive at the price that had formed during the week – 70 UAH/liter. It is already in Ukraine, at 72 UAH/liter wholesale and 73 UAH/liter at stations. The price will definitely tend toward 80 UAH/liter by the end of the week, and then we will see. Morning price quotes (in Europe – EUR) are equivalent to 80 UAH/liter. Plus the station’s markup, plus transportation. That is, it may rise to somewhere around 90 UAH/liter,” Kuyun said at a briefing at the Media Center of Ukraine in Kyiv on Monday.
At the same time, he noted that he does not believe in a diesel fuel price of 100 UAH/liter.
“Everyone likes round numbers. And is 90 UAH/liter not enough? … I honestly don’t believe in 100 UAH/liter myself. For the simple reason that the global economy cannot sustain such prices. All forces will be mobilized to extinguish this,“ said the director of A-95.
At the same time, he noted that demand for fuel has begun to decline. (Last week, Kuyun reported its growth amid a 1.5-fold increase in prices – ER.)
”Among the good news: networks say that demand has declined. The hype drove up the price. This happened not only in Ukraine. There was a grab-and-go reflex, but, as I understand it, everyone who could has already filled up, and the market has calmed down,“ the expert noted.
He also stressed that the rise in gasoline prices has slowed down.
”There is a slowdown in gasoline. If there is a correction, it will be minor. More or less, gasoline prices may stabilize at around 70 UAH/liter,” Kuyun believes.
He explained that the European gasoline market, unlike the diesel market, has a surplus, so there are no preconditions for such sharp price jumps.
As for forecasts, he said that the end of the war in Iran, regardless of the outcome, will lead to lower oil prices.
“I think that no matter how the war in Iran ends, the result will be the same – oil prices will fall because the reason for the price increase will disappear. And the situation will quickly return to normal… Maybe even below $60 per barrel when Iran resumes production,” Kuyun said.
At the same time, he noted that traders are now very cautious about contracting fuel supplies amid a possible decline in prices if the war in Iran ends.
“If the price falls, there will be a review of tactics. Many traders are very cautious about contracting and purchasing because they are listening to the news and statements by Trump, who promises to end everything soon. If the price collapses, for example, to $800/ton, what will happen to the fuel purchased at $1,300/ton?” Kuyun described the situation.
At the same time, he emphasized that the number one issue is not the price of fuel, especially diesel, but its physical volumes in Europe.
“After Hungary, diesel supplies from Poland have been suspended for a week, as Poland has taken a break. Romania and Moldova have closed their exports. There is also a pause in other directions. And here the government needs to talk to its partners. Everyone has closed down out of fear… But nothing special is happening – oil is flowing, factories are working,” said the director of A-95.
At the same time, Kuyun emphasized that the rise in oil prices has a very positive effect on the Russian economy, which “in January-February traded at zero for many fields, and at a loss for depleted ones.”
As reported earlier on Monday, Kuyun, director of the consulting company A-95, noted that it is only possible to restrain retail fuel prices, in particular for diesel, amid a sharp surge in oil and petroleum product prices on world markets by reducing VAT. According to him, in 2022, VAT was reduced from 20% to 7%, and today a similar step would dampen prices by UAH 10/liter.
Over the weekend, the price of oil rose to $117 per barrel (+24%) and diesel fuel (DF) to $1,367 (+18%) per ton on the ICE Futures Europe exchange in London.
