Second wave of fuel price rises: Pavlo Klimkin’s forecast
Speaking on the News.LIVE programme ‘Security Architecture’, the diplomat emphasised that the first wave of price rises has already taken place, but a much more severe bout of inflation lies ahead.
Klimkin’s forecast: The flywheel effect
According to Klimkin, historical experience of oil crises points to an inevitable economic downturn, which Ukraine will eventually feel too. He stressed that in today’s world there are no isolated conflicts, and the situation surrounding Iran clearly demonstrates how the military flywheel can destabilise the global economy. Rising oil prices on international markets will inevitably lead to higher logistics costs, which in turn will drive up prices for essential goods and services.
Earlier, The Public reported that due to the destruction of its own oil refining infrastructure, Ukraine has switched to 100% fuel imports. This situation leaves our domestic market completely defenceless against external fluctuations: 40% of the cost of every litre at the petrol station is the direct purchase price on global exchanges. Consequently, any oil price shock, as warned by Klimkin, will immediately affect Ukrainian prices.
At present, experts assess the situation as under control; however, Ukrainian motorists should prepare for the fact that stability at petrol stations will depend entirely on how severe the ‘second wave’ of the global energy crisis turns out to be.
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