The Government Will Not Reduce Excise Tax and VAT on Fuel: New Cashback Program
The Cabinet of Ministers of Ukraine does not consider the possibility of reducing the value-added tax or excise tax on fuel in order to lower fuel prices. This was stated by Prime Minister Yulia Svyrydenko during the hour of questions to the government in the Verkhovna Rada.
This is reported by AgroReview
Government’s Position on Fuel Taxes
Yulia Svyrydenko emphasized that all taxes and fees collected from fuel sales are a key source of replenishing the state budget. It is from these funds that the Ukrainian army and other critically important sectors are financed.
At the same time, she reported that the company “Ukrnafta” will sell fuel with a minimal markup to establish a “benchmark for fair prices in the market under current conditions.”
Cashback Program and Market Stabilization
President Volodymyr Zelensky announced the launch of a support program for Ukrainians who are facing rising fuel prices due to market destabilization. This mechanism will operate in the form of cashback, allowing for partial compensation of fuel expenses. According to Svyrydenko, the program will be “remodeled” within the existing cashback system and corresponding budget expenditures. In particular, Ukrainians will be able to receive 15% cashback on diesel fuel, 10% on gasoline, and 5% on autogas. The program will apply to all gas stations that join it and will last until May 1, 2026.
“The global fuel crisis is unfolding due to the war in Iran. This affects everyone—America, Europe, Asia. Ukraine imports over 85% of its fuel, and therefore this crisis undoubtedly impacts us as well,” said Energy Minister Denys Shmyhal.
According to the minister, the priority for the Ministry of Energy remains preventing a repeat of the situation that arose in the spring of 2022. This primarily concerns ensuring the defense forces of Ukraine. Currently, as Shmyhal noted, there are sufficient reserves of diesel fuel and aviation kerosene, but purchases and negotiations with foreign partners for additional volumes are ongoing.
The second most important task is conducting the sowing campaign. The minister reported that the current need for diesel in the agricultural sector is about 300 thousand tons. Most farmers currently have enough fuel reserves for several weeks, and the sowing is proceeding according to schedule.
Shmyhal also noted that most contracts for fuel supply to businesses and retail are being fulfilled, despite the difficulties that arose in early March.
In March, Ukraine imported nearly 250 thousand tons of gasoline, diesel fuel, and liquefied gas. The state currently has reserves of 100 thousand tons each of gasoline and diesel. Supplies are being made from over ten countries, with Poland, Lithuania, Romania, and Greece being the largest suppliers.
At the same time, a draft resolution regarding the stabilization of fuel prices has been registered in the Verkhovna Rada, which, among other things, provides for the possibility of reducing VAT on petroleum products. However, a final decision on this matter is currently absent.