Business news from Ukraine

UKRAINE PREPARES DECISION IN RESPOND TO OIL PRICES INCREASE

Ukraine is preparing decisions in response to the rise in world prices for oil and, accordingly, for petroleum products, First Deputy Prime Minister Yulia Svyrydenko stated.
“Now we see that oil prices are rising at a fast pace, followed by rising prices for petrol and diesel fuel in Ukraine. The government will make the necessary decisions, we are now developing a comprehensive plan to stabilize the situation,” she said during a meeting of the Congress of Local and Regional Authorities in Kharkiv.

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THE MIDDLE PRICE OF SQ M IN KYIV IN JAN IS UAH 35,000

Average price of one square meter in new residential complexes in Kyiv in January-2022 is UAH 35,000 ($1,280), the minimum price is UAH 22,900 ($840), according to market research data from the LUN portal.
According to the research results, the average cost of one square meter in new economy class residential complexes of Kyiv in January is UAH 23,000 ($850), comfort class – UAH 27,200 ($1,000), business class – UAH 52,900 ($1,940), premium class – UAH 78,600 ($2,900).
According to LUN analysts, prices vary depending on the location of the facility. So, in the Pechersky district, the average price per square meter in new housing estates is UAH 69,100 ($2,550), in Podilsky – UAH 48,800 ($1,800), Shevchenkivsky – UAH 44,500 ($1,630), Holosiyivsky – UAH 37,500 ($1,380), Dniprovsky – UAH 30,500 ($1,120), Sviatoshynsky – UAH 30,000 ($1,100), Obolonsky – UAH 28,500 ($1,050), Solomiansky – UAH 28,000 ($1,030), Darnytsky – UAH 26,500 ($980), Desniansky – UAH 23,900 ($880).
According to statistics, the average price per square meter in new residential complexes in the suburbs of Kyiv in January is UAH 21,200 ($780). At the same time, in Vyshgorod it is UAH 23,500 ($860), in Brovary – UAH 19,000 ($690), Boryspil – UAH 19,600 ($720), Hatne – UAH 21,700 ($800) , Sviatopetrovsky – UAH 20,200 ($740), Vyshneve – UAH 24,500 ($900), Sofiyivska Borschahivka – UAH 22,800 ($840), Petropavlivska Borschahivka – UAH 23,900 ($880) , Irpen – UAH 23,100 ($850), Bucha and Hostomel – UAH 20,000 ($730).

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UKRCEMENT: RISE IN COAL PRICES FORCES CEMENT PRODUCERS TO WORK WITH MINIMUM MARGIN

The majority of cement producers in Ukraine are forced to work with minimum margins due to the rise in coal prices by more than two times, the Ukrcement association has reported.
“The price swing for coal this year did not pass us by. The supply contracts were signed last year at an average price of $60 per tonne, and in August, suppliers agreed to ship coal at a price of at least $175 per tonne. This creates significant pressure on the pricing policy. It is impossible to make cheap goods out of expensive components,” Chairman of the Ukrcement association Pavlo Kachur said in an interview with Interfax-Ukraine.
According to him, the cost of energy is 52-55% of the cost of clinker required for cement production. At the same time, all Ukrainian cement plants have previously been modernized and switched to coal due to the high price of gas.
The situation with the rise in prices for cement in Ukraine due to the rise in prices for coal is not unique and is observed in the markets of other countries, Kachur said.
“For example, Turkish cement producers sharply raised cement prices in July due to the rise in the cost of coal. We proceeded from the fact that we must take into account the needs of consumers. Therefore, some companies significantly minimized margins in order to go through this difficult period with minimal costs for cement plants and the construction market as a whole,” he said.

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HOUSING PRICES IN UKRAINE GROW BY 15.8% IN Q3

The housing price index in Ukraine in July-September 2021 amounted to 115.8% compared to the same period in 2020, the State Statistics Service has reported.
According to its data, prices in the primary market rose by 14.3%. Most of all three-room apartments have risen in price – by 16.3%, the least – two-room apartments (by 13.4%).
According to the State Statistics Service, in the secondary market, housing has risen in price by 17% over the year. Three-room apartments added the least in price – 15.8%, two-room apartments added the most (18.4%).
Compared to the fourth quarter of 2020, housing prices grew by 13.8%, in the primary market by 12.5% and in the secondary market by 14.9%.

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PRICES FOR PUBLIC TRANSPORT TO INCREASE IN KYIV

Prices for public transport will be raised in Kyiv, First Deputy Head of the Kyiv City State Administration Mykola Povoroznyk said.
“This is an unpopular step that we have to take in order to maintain the stable operation of municipal carriers. Today, in the face of rising energy tariffs, leaving the fare at the current level means driving carriers into debt holes, and subsequently paralyzing the work of transport companies. Therefore, we are forced to begin the procedure for increasing the tariff. Now we are awaiting proposals from utilities regarding the economic feasibility of the tariff. After that, a reasonable fare will be formed, and we will submit a proposal for public discussion,” Povoroznyk said, according to the statement of the press service of the Kyiv City State Administration.
He also said that in the summer the cost of travel increased in many cities of Ukraine: in Lviv, Poltava, Mykolaiv, Zaporizhia and others, while Kyiv authorities postponed the moment of increasing tariffs.
“Today, when the city has taken measures not to increase the tariff for heating agents for the population, but to compensate for the difference at the expense of the local budget, it is simply impossible to increase funding for the already subsidized public transport. Such a step could lead to underfunding of city programs, which are critically important for many people in Kyiv,” Povoroznyk said.
He separately noted that at the same time, all available travel benefits for Kyiv residents will remain.

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STATE-RUN UKRZALIZNYTSIA HAS NO PLAN TO RAISE TICKET PRICES FOR PASSENGERS

JSC Ukrzaliznytsia in 2022 does not plan to raise prices in passenger traffic.
“So far, there are no such decisions. We have indexed very smoothly this year. Not all at once, but in relation to the consumer price index and stretching for the whole year. On the contrary, we plan to stimulate individual services with promotional rates. For example, with tour operators, we are talking about how to support the transportation of large groups by rail by setting discounts on bulk reservations depending on the size of the group,” Oleksandr Pertsovsky, the director of the Passenger Company branch, said in an interview with Interfax-Ukraine.
He also noted that in the medium term, Ukrzaliznytsia plans to initiate a revision of tariff regulation in order to enter a more flexible pricing policy in the passenger segment.
“What I mean: a common practice among transport operators is that the earlier you buy tickets, the cheaper they are, and if at the last minute – the more expensive. to the price. This will allow us to increase the average profitability while still giving the best price to the individual passengers who are most price sensitive. As an option, make a greater distinction between classes. We are also working on the possibility of changing pricing in relation to distances,” he explained.
According to him, all this requires both certain regulatory changes and programmatic changes in terms of restructuring the current IT system of Ukrzaliznytsia.
The director of the Passenger Company branch also noted that in comparison with 2020, in 2021 Ukrzaliznytsia showed good dynamics in terms of covering expenses with income in the segment of passenger transportation.
To further improve the situation, the company is working on the introduction of contracts for socially significant transportation, since for many years the company had “a huge percentage of underfunding” from the local authorities.
“Plus, we are actively working on the issue of control over fares. In the suburbs, for example, we are piloting an IT system that allows you to sell tickets online or through kiosks, both single and subscriber for passengers. We are also reviewing the configuration of the turnstile system to reduce the percentage of free riders,” Pertsovsky said.
He also stressed that the idea of bringing passenger traffic to the level of prime cost is impossible within the framework of the current market model and does not make sense.

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