High fuel prices. How much do petrol station chains make on every litre?
This is discussed in an RBC-Ukraine article entitled ‘The fuel barons: Who owns Ukraine’s largest petrol station chains and who sets the prices?’.
The cost of imported petroleum products accounts for the largest share of the final fuel price – around 50%.
At present, Ukraine is forced to import all its fuel due to the shutdown of the Kremenchuk Oil Refinery, says Serhiy Kuyun, director of the “A-95 Consulting Company”.
Taxes – excise duty and VAT – account for a significant share. In the price structure of diesel fuel, they make up 35%, and for petrol, 40%. Logistics costs, labour costs and so on account for a further percentage.
The profit margin for most petrol station chains is around 5–7% or 3–5 hryvnias per litre, says the expert.
How fuel retailers can be categorised by price
The market is divided into three groups of petrol station chains: the premium segment, the mid-range, and discounters.
Serhiy Kuyun classifies SOCAR, OKKO and WOG as premium brands, and AMIC, UPG and the KLO network as mid-range.
The mid-range segment also includes the state-owned Ukrnafta network, which, by government decree, sells fuel at a minimal margin to act as a price regulator for the market.
Discounters include chains such as BRSM-Nafta, Avantage 7 and Marchal.
“These three networks have around 800 stations, which accounts for 15% of the market,” says Kuyun.
As a reminder, as of 27 May, the price of A-95 (standard) and A-95 (premium) petrol in the "Ukrnafta" network was 74.90 and 76.90 hryvnias per litre respectively, which is 5-6 hryvnias cheaper than the cost of the same fuel in the OKKO, WOG and SOCAR networks.
Diesel (standard) was sold at Ukrnafta petrol stations for 86.90 hryvnias, whilst at OKKO and WOG stations it was 89.90 hryvnias per litre.
As a result of selling fuel at a minimal margin, as well as measures to rebrand its stations and marketing efforts, Ukrnafta became the leader in petrol and diesel sales in April this year.
In mid-May, Kuyun reported that there were no supply issues in Ukraine’s fuel market, with diesel stocks across the country sufficient for over a month and petrol stocks for almost two months.
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