Price regulation doesn't apply to premium fuels – economy ministry

The Ministry of Development of Economy, Trade, and Agriculture of Ukraine has released a clarification, elaborating on the Cabinet's move to cap trade markup for petrol and diesel fuel.

The government decree, the explanation reads, does not apply to premium fuels.

The markup cap covers prices for petrol and diesel fuel included in the government's list of goods of significant social importance, namely: A-92 petrol, A-95 petrol, and diesel fuel, the ministry's press service reports.

"'Brand premium' fuel with improved quality indicators, whose marking includes a certain trademark, offered by gas stations for premium cars at a price higher than that of socially significant fuel, doesn't fall under the trade markup cap," the statement says.

The explanation was released after a number of gas station chains suspended the sales of "premium" brands of petrol and diesel fuel.

The operators say the move is a response to the Cabinet's decision to introduce state regulation of fuel prices, setting the camp on trade markup.

The OKKO network reported that the Cabinet's move made the sale of "premium" fuels unprofitable.

Background

• Due to the unstable situation with the import of light petroleum products from Belarus and Russia, the Antimonopoly Committee initially warned market operators against unreasonable price hikes before the Cabinet of Ministers took over.
• The main reason behind climbing prices for gasoline is the rising global prices for oil and petroleum products. Since early April, global oil prices have risen from $62 per barrel to $69, while petroleum products' prices – by 7-11%.
• On May 11, the government obliged gas station networks to warn about a scheduled increase in prices by 1% or more 20 days prior.
• On May 12, a government decree came into force, adding petrol brands A-92 and A-95, as well as diesel fuel, to the list of goods with high social significance – along with buckwheat, milk, pasta, and protective face masks.
• On May 14, the government introduced state regulation of petrol and diesel prices pending quarantine. According to the decision, the level of the trade markup to the average price of diesel fuel shall be capped at UAH 7 per liter, and petrol – at UAH 5 per liter.