Ukrzaliznytsia fare hikes could push up fuel prices in Ukraine

Rising freight tariffs at Ukrzaliznytsia could trigger an increase in gasoline and diesel prices in Ukraine by driving up logistics costs for suppliers.

That is the view of Alexander Sirenko, an analyst at the consulting firm Naftorynok.

According to the expert, the transport component is one of the key elements of fuel pricing, and any increase in shipping costs inevitably affects the final price for consumers.

“Logistics costs undoubtedly affect delivery prices. If the average logistics component used to be around 2–3 hryvnias per liter, we will now be approaching 4–5 hryvnias. It needs to be calculated, but it is clear that it will be higher than before,” Sirenko said.

Beyond the tariff factor, the Ukrainian market is also under pressure from external conditions. Following the escalation of the situation in the Middle East, demand for petroleum products in Europe has risen — primarily for diesel fuel — leading to a significant widening of the gap between crude oil prices and finished diesel prices.

“Oil has been falling in price for several days, but diesel fuel is not responding to that decline. This is an abnormal situation. Ukraine does not have its own production in the necessary volumes and is therefore forced to purchase expensive imported resources,” Sirenko explained.

The expert also warned that rising fuel prices would affect not only motorists but also transportation costs, agricultural production, and food prices. In his view, the government could ease the price pressure, but that would require prompt decisions from the Cabinet of Ministers.

Ukrzaliznytsia had previously put forward an initiative to raise tariffs on certain types of freight transportation by 30%. The Verkhovna Rada called on the new government to revise the corresponding order, noting that it does not meet economic security requirements and was adopted in violation of the law. Participants in the meeting stated that Ukrzaliznytsia’s financial problems should be resolved through state support and international financing, rather than being passed on to Ukrainian shippers.