AMCU proposes Cabinet to review fuel taxes

The Antimonopoly Committee of Ukraine will appeal to the Cabinet of Ministers with proposals for temporarily adjusting certain tax components of the fuel price during a sharp increase in world prices.

The Committee made the corresponding decision on August 6 after reviewing the state of competition and deepening crisis in the markets of light petroleum products.

According to the AMCU, during the crisis, world indices and prices for gasoline and diesel fuel more than doubled. The purchase cost of fuel makes up almost half of its retail price in Ukraine, and the share of VAT and excise exceeds 40%.

Since VAT depends on the customs value of fuel and the excise amount, rising import prices automatically increase the tax burden. Eventually, the additional costs are passed on to each liter of fuel at gas stations.

Additional financial pressure on operators is created by the need to form minimum stocks of petroleum products. The AMCU warns that the simultaneous increase in procurement, tax and operating costs may weaken competition, primarily limiting the capabilities of small gas station networks.

The Committee proposes to consider a mechanism for temporarily adjusting taxes on imported petroleum products during periods of sharp price increases in world markets. The government is also recommended to improve the taxation of operations for the formation of mandatory fuel reserves.

At the same time, the AMCU does not make decisions on reducing taxes. The Committee only submits relevant proposals to the Cabinet of Ministers, which must decide whether such a mechanism is possible and define its parameters.

Based on materials from: Antimonopoly Committee of Ukraine