Ukraine's Cabinet proposes to return excise taxes on fuel

The Ukrainian government has submitted to the parliament a bill on the abolition of preferential taxation on fuel, according to the update on the website of the Verkhovna Rada.

The Cabinet of Ministers proposes to restore the rate of excise tax on motor gasoline, heavy distillates and other petroleum products, liquefied gas, butane, isobutane in the amount of 100 euros per 1,000 liters.

According to Yaroslav Zheleznyak, Golos faction MP, the proposal is to return excise taxes on all types of fuel.

"It will be approximately plus UAH 4-4.5 ($0.11-0.12) per liter," Zheleznyak said.

At the same time, he noted that VAT, according to the draft law, remains unchanged at 7% instead of 20%, as it was before.

According to the parliamentarian, the government argues for the return of excise taxes by the lack of money for the construction and repair of roads.

"According to the government's calculations, such an initiative will bring UAH 2 billion ($54 million) per month," added Zheleznyak.

Fuel prices

After the start of the full-scale invasion, the authorities abolished excise taxes on fuel and reduced VAT. At the same time, there was a temporary shortage of fuel at gas stations in Ukraine: prices rose, and long queues formed at gas stations. This happened after Russian forces destroyed or damaged approximately 15 oil depots in Ukraine. The occupiers also fired at the largest oil refinery in Ukraine, the Kremenchuk Oil Refinery, which was the main producer of fuel in Ukraine.

Since the beginning of the active war, Ukraine has lost almost all fuel imports that came from the Russian Federation, Belarus and by sea.

The government announced that the problem of fuel shortage should be completely resolved by the fall. By that time, they plan to sign new contracts.