Excise Bill No. 11256: A Step Towards Balance and Budget Replenishment
Kyiv, May 30, 2024
The Cabinet of Ministers of Ukraine has adopted Bill No. 11256, “On Amendments to the Tax Code of Ukraine for Aligning National Legislation with European Union Standards on Excise Duty.”
The Ukrainian Oil and Gas Association (UOGA) supports this challenging decision, emphasizing its fairness and effectiveness compared to previous initiatives. This bill proposes a phased increase and alignment of fuel excise duty rates.
According to the proposed changes, starting from July 1 of this year, the excise duty on gasoline will increase to €242.60 per 1000 liters, the excise duty on diesel fuel will rise to €177.60 per 1000 liters, and the excise duty on liquefied gas will increase to €165 per 1000 liters. By the beginning of 2028, the excise duties will be:
- Gasoline: €359 per 1000 liters
- Diesel fuel: €330 per 1000 liters
- Liquefied hydrocarbon gas: €277 per 1000 liters
UOGA President Yaroslav Starovoytenko stated:
“One of the key goals of the proposed changes is to ensure a balanced increase in excise duties on all types of motor fuel, creating fairer conditions for all market participants. This guarantees that every car owner, regardless of the type of fuel, fully participates in budget replenishment.”
Mr. Starovoytenko also noted:
“It is clear that the proposed changes will maintain economic benefits for LPG consumers. The proportional increase in excise duties on gasoline and LPG will keep the difference in retail prices at 25 hryvnias per liter (assuming other factors remain unchanged), making LPG prices attractive for motorists. The volume of its consumption will not change significantly. According to the Ministry of Finance, such changes in fuel excise duties will contribute to an increase in budget revenues by almost 2.7 billion hryvnias monthly in the second half of 2024.”
The UOGA understands the necessity of these forced unpopular steps to increase taxes, as funding for the defense and security sector is possible only through internal sources.
The Ukrainian Oil and Gas Association (UOGA) is an industry association representing the interests of the largest players in the oil and gas market. Currently, the association includes the largest wholesale, retail, extraction, and processing enterprises representing national, international, private, and state businesses, including WOG, OKKO, Shell, AMIC Ukraine, SOCAR, KLO, UPG, Parallel, Ukrgasvydobuvannya, and Ukrnafta. The association actively participates in the development of the country’s legislative framework, monitoring and resolving industry issues, and actively interacts with government authorities, private and state enterprises, industry and consumer associations, consulting agencies, and the media to implement and comply with European quality standards in the market, as well as protect the interests of association members.
