How and why will gas station prices change after January 1, 2026

Author

Valery Moisieiev

Starting January 1, 2026, fuel excise tax rates will increase. This is an expected event, as it is stipulated in the law passed last summer. There will be two more such increases: on January 1, 2027, and January 1, 2028.

The excise tax on gasoline will increase from €271.7 to €300.8, on diesel fuel from €215.7 to €253.8, and on liquefied gas from €173 to €198 (all per 1,000 liters). This increase could lead to higher fuel prices, which would stimulate price increases for other goods and services.

How will prices at gas stations change after January 1

Retail prices for automotive fuel in Ukraine consist of the purchase price (import or domestic supply), taxes (VAT, excise duty), logistics and operating costs, and gas station profits. The purchase price and taxes, which depend on world prices and exchange rates, are the main components.

The purchase price (wholesale cost) depends on global oil and petroleum product prices, as well as the hryvnia exchange rate, since Ukraine currently imports almost all of its fuel.

Logistics costs account for 2-3% of the retail price.

The retail markup at gas stations is a highly variable parameter. It includes operating costs (salaries, rent, marketing, electricity) and the operator's profit. It is generally considered to be 7-14%, but, as they say, "there are exceptions."

If we convert the expected increase in excise duties into hryvnia, it will amount to:

gasoline – 1.5–2.5 UAH/liter;
diesel fuel – 2−3 UAH/liter;
autogas – 1−1.8 UAH/liter.

However, there is no reason to believe that retail prices will rise by exactly that amount. The continuing decline in fuel sales will curb the appetites of gas station operators. Therefore, when setting new prices, they will have to solve a complex optimization problem or proceed cautiously by trial and error.

In addition, prices may rise due to increases in global fuel prices and the conditions of its delivery to Ukraine, rather than excise taxes.

Excise duty on fuel in Ukraine

According to the Tax Code, excise duty on fuel is paid by importers at the border or by fuel producers if the fuel is produced in Ukraine.

The excise tax on retail fuel sales in Ukraine was abolished in 2017.

The state budget for 2025 plans to receive UAH 106.5 billion in excise tax revenues from imported fuel, and in 2026 – UAH 113.7 billion (+6.8%). The government expects that the increase in tax payments will be largely ensured by the increase in excise taxes from January 1.

At the same time, in 2025, revenues from excise taxes on domestically produced fuel were projected to amount to UAH 19.5 billion, and in 2026 – UAH 17.3 billion (-11.3%). This decline is clearly linked to the reduction in domestic fuel production following the aggressor's attacks on oil refineries.

It should be noted that the Tax Code classifies not only gasoline, liquefied gas, and diesel fuel as combustible materials, but also methanol, benzene, etc. These goods also contribute to the state budget in the form of excise tax revenues.