Do you still have "gas"? LPG prices in Ukraine have become higher than in some European countries

According to the Institute of Car Market Research in Ukraine, about 18% of the passenger car fleet is equipped with gas cylinder equipment (HBO), that is, consumers of liquefied propane-butane mixture (LPG). Such a rather high share is explained by the fact that, in general, the Ukrainian car fleet is older compared to the European one, moreover, it is saturated with passenger cars developed back in the times of the USSR, that is, those with outdated engine designs, which are now economically impractical to operate on gasoline.

In addition, the existence of stereotypes among Ukrainian buyers about the "reliability and high resource of atmospheric engines with large volumes" contributes to the replenishment of our car fleet with cars from American countries, equipped with engines of old models, without turbochargers and direct injection of gasoline, which are also not distinguished by economical gasoline consumption, and the installation of HBO for them was not the only option to preserve the allowable cost of operation.

When we compare the share of cars with HBO in the fleets of EU countries, it will be extremely insignificant — less than 1%. The reason for this is that many EU countries have environmental taxes (direct or included in insurance) depending on the amount of CO2 emissions. Thatʼs why buyers there focus on more modern solutions — cars equipped with small-volume engines with turbocharging and direct fuel injection, which provide better economy and produce fewer harmful emissions. Or hybrids or electric cars in general.

However, the situation on the fuel market, which we monitor thanks to our partners — NaftoRynok analytical agency, may soon change the share of LPG cars in the Ukrainian fleet (and market) — it will decrease. The reason for this will be the price of LPG, which is constantly increasing.

On the day of publication of this article, Ukrainian gas stations dispensed "autogas" at an average of UAH 35.20/l, and the highest price was recorded at the shelves of the OKKO chain, UAH 36.99/l. At the same time, NaftoRynk analysts reached another conclusion: the propane-butane mixture in Ukraine has become more expensive than in some European countries.

In particular, in Poland, Estonia, Lithuania and Latvia, the average price of gas at gas stations as of the beginning of December was €0.72...0.80/l. So it is now more profitable for a driver to fill up at a gas station in Poland than in Ukraine after a record increase in the excise duty on liquefied gas in September 2024. In addition to the mentioned countries, propane-butane is sold cheaper than in Ukraine in Bulgaria, the Czech Republic, Slovakia and Romania: €0.63...0.75/l.

Analysts consider the reason for this level of prices to be the introduction of record high excise rates on LPG in Europe, which were introduced in Ukraine by Law No. 11256-2, which came into force at the beginning of September. According to it, the excise duty on liquefied gas will increase until 2028. and will eventually become one of the largest in Europe — €250/1000 l or €463/t (it will be higher only in Denmark — €593/t).

The increase in excise duty on autogas will take place according to the following schedule:

• from September 1, 2024 — increased from 52 to 148 euros per 1,000 l;
• from January 1, 2025 — 173 euros for 1000 l;
• from January 1, 2026 — 198 euros for 1000 l;
• from January 1, 2027 — 223 euros for 1000 l;
• from January 1, 2028 — 250 euros for 1000 l.

That is, even if the price of this type of fuel on world exchanges does not change, the hryvnia exchange rate against foreign currencies will remain constant, the increase in the price of LPG is already programmed in the legislation. The next price increase should be expected after the new year and beyond, according to the schedule above.

At the same time, since the increase in the price of "autogas" will not occur synchronously with gasoline, the economic feasibility of using a propane-butane mixture will become less and less each time, which in turn will be reflected in the car market.

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