Today, January 20, at some gas stations, fuel prices rose by 0.5 UAH at once. The most interesting thing is that experts predict a further increase in fuel prices. By the end of January, A-95 gasoline may rise in price by 1 hryvnia.
The Internet is full of demonstrative arguments about the fair price of fuel in Ukraine. The motivation is simple. They say that in January 2014, the situation was as follows:
January 2014:
- dollar: ~ 8.20 UAH,
- oil grade ICE Brent Crude: ~ 106.25 USD,
- liter of A95 gasoline: ~ 11.3 UAH. ($1.38)
Experts believe that in dollar terms, the price reduction was about 35%. This supposedly corresponds to the decline in gasoline quotes on the European market over this period - 36% (from $926 to $589/t). But let's arm ourselves with a calculator, understand and forgive the oil traders, and try to calculate the fair price of gasoline, taking into account the cheaper oil and the devaluation of the hryvnia.
January 2015:
The cost of oil in January 2015 (conditionally - $50)/106.25 (January 2014) = $0.47. 1.38*0.47 = 0.64*21= 13.44 UAH ($0.64)
You can also calculate using another method:
- dollar on the black market: ~ 21 UAH (we deliberately take the black market, although it is unlikely that owners of the most powerful gas station chains settle accounts under such conditions)
- oil: ~ 50 USD (we assume that oil has halved in price, in reality - more)
- liter of A95 gasoline: ~ 14.49 UAH. ($0.69)
Going to meet oil traders, you can include in the cost of gasoline a new turnover tax on excisable goods in the amount of 5%.
We get – 14.11 UAH per liter. When calculated using another method - 15.21 UAH.
Today, even taking into account the rise in price, a liter of A-95 costs 16.49 UAH-18.5 UAH.
Expert calculations
“If today the dollar were sold at 8 UAH, the price of A-95 at gas stations would be no higher than 7 UAH/l. And vice versa: if a barrel of oil were $100, then a liter of fuel in Ukraine would cost at least 24-25 UAH,” - says Sergey Kuyun, director of the Consulting Group A-95.
Let's estimate the fair cost based on Sergey Kuyun's comments.
Suppose 1 dollar costs 8 hryvnias. Based on our “non-expert” calculations, then gasoline would cost $0.64 today (using one method), $0.69 – using another.
We calculate: 0.64*8=5.12 UAH. or 5.52 UAH.
Of course, fuel market experts understand pricing better, so it is possible that taking into account taxes, etc., gasoline would cost 7 UAH per liter, as Kuyun said. At an exchange rate of 8 UAH per $1, this means that in this case, 1 liter of gasoline would cost $0.88.
If we calculate at the current NBU rate: 0.88*15.81=13.9 UAH. If at the black market rate (21 UAH), we have the following: 18.48 UAH. But how can gasoline in Ukraine cost $0.88 if a year ago it cost $1.38 when oil was twice as expensive?
Conclusions
- We don't understand anything about the peculiarities of pricing in Ukraine
- In Ukraine, are all calculations “under the table”?
- If you look at the calculations and arguments of oil traders, it is quite possible that in February A-95 gasoline will cost 20 hryvnias.
- If (or when?) the dollar costs 30 hryvnias, gasoline will rise in price to 25-27 hryvnias.
- If oil falls to $20, gasoline prices in Ukraine will not change..?!
- If you need to prepare a sleigh in summer (too late – no point), then a bicycle – in winter. Spring is coming soon, so take a look at a bicycle. It will come in handy…
