Increase in Fuel Excise Taxes in 2025: How It Will Affect Prices and the Budget
Starting from January 2025, excise taxes on gasoline, diesel fuel, and autogas have increased in Ukraine; however, experts believe that most drivers will not feel a significant rise in prices at gas stations due to the decrease in global oil prices.
This is reported by AgroReview
New Excise Rates: Impact on Fuel Prices
As of January 1, the excise tax on gasoline has increased by 1.75 hryvnias per liter, on diesel by 2.25 hryvnias, and on autogas by 1.5 hryvnias. Despite this, market analysts note that due to the drop in oil and petroleum product prices on global markets, wholesale fuel prices in Ukraine have decreased. This allows networks in the medium and high price segments to avoid significant increases in retail prices for consumers.
At the same time, in budget networks, the price may rise by 1.5 hryvnias per liter. The situation for liquefied gas is somewhat different: in this segment, there is no price buffer, so the increase may be 1–1.2 hryvnias per liter, although a full rise of 1.5 hryvnias is not expected.
Planned Increase in Excise Taxes and Its Consequences for the Budget
The current increase in excise taxes was anticipated by a bill passed in the summer of 2024 and is the third consecutive increase: the previous two occurred on September 1, 2024, and January 1, 2025. By the end of 2025, the state budget will receive 100 million hryvnias more in excise taxes daily compared to 2024. In 2026, revenues will increase by another 62 million hryvnias daily. The majority of these funds are directed towards financing the defense sector.
From January 1, 2026, the cost of a liter of gasoline will include 25 hryvnias in taxes (including VAT), 22 hryvnias in diesel, and 16 hryvnias in autogas. Thus, approximately half of the cost of fuel at gas stations will consist of taxes.
Electric Vehicles: Tax Benefits and Budget Losses
Alongside the increase in excise taxes in 2025, the number of electric vehicles has significantly risen—almost doubling to reach 225,000 units. Electric cars are exempt from excise taxes, customs duties, and contributions to the Pension Fund. Thanks to generous incentives, Ukraine has already surpassed most European countries in the share of electric vehicles in its vehicle fleet.
“According to experts, in 2025, the budget lost over 40 billion hryvnias due to the electrification of transport.”
In 2026, the budget will lose another over 20 billion hryvnias, even with the return of VAT on electric vehicle imports. These amounts need to be deducted from the expected 62 billion hryvnias in additional excise revenues next year. For comparison, the UK government is already considering the introduction of a mileage tax for electric cars, as budget losses become increasingly noticeable.