Fuel: the excise duty will increase, as will the prices. But not as much as proposed in the Cabinet of Ministers
As of July 1, if draft law No. 11256 submitted by the Cabinet of Ministers to the Verkhovna Rada were to enter into force, prices for all types of automobile fuel would increase. Gasoline and diesel would add a few hryvnias each, and the most noticeable increase would be for liquefied autogas — up to 6 hryvnias/l. This additional tax burden in the form of an excise tax was proposed in the mentioned document.
How the price of the propane-butane mixture affects the car market, as well as the service sector (in terms of the sale and installation of gas cylinder equipment kits), specialists of the Institute of Car Market Research previously studied : the price of LPG directly affects the number of conversions of cars to run on two types of fuel, as well as buyersʼ interest (and market value) in cars with HBO in general.
Accordingly, if you add another 6 UAH to the current average price of "autogas", which is around 26.5 UAH/l, in this case it would lead to crossing the "psychological limit" of 30 UAH/l, at which car owners with HBO would still buy this fuel, but with a much smaller saving effect, and the number of new HBO installations would decrease rapidly. Further growth of the exchange rate, which is also reflected in the retail prices of LPG, could generally put an end to the topic of conversion of cars "for gas".
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However, among the three documents available in the Council, which provide for an increase in excise duty on fuel, the parliamentarians supported the alternative one, No. 11256-2, while in the first reading (that is, certain amendments may still be made to it before the vote as a whole). In it, the excise duty rates, in particular on LPG, are much more moderate.
According to the assessment of NaftoRynku analysts, if the mentioned document is adopted as a whole and without changing the excise tax values embedded in it, while maintaining the current exchange rate of the euro, after the first stage of rate increases (from July 1, 2024), the tax burden on 1 liter of gasoline will increase by UAH 1.5/l, diesel fuel — by UAH 2/t, liquefied gas — by UAH 0.19/l.
This will be only the first round of fuel tax hikes, with several more planned to follow, with the last increase taking place (if the legislation is not changed) in 2028.
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