6% VAT alone brings petrol prices back to pre-war levels

Only a reduction in VAT on fuels to 6% could bring the price of gasoline back to pre-war levels in Ukraine. Indeed, since February 24, each liter has already increased by more than 21 cents, and a possible reduction in the current maximum rate of VAT (23%) to the intermediate rate (13%) will only lower the price by around 17 pennies. cents. The minimum rate of 6% would reduce the cost by up to 28 cents. As for diesel, even 6% might not be enough to bring the price back to pre-conflict levels.

The accounts were made by the general secretary of Apetro, António Comprido, at the request of JN. “If we round the price of a liter to 2 euros and instead of applying VAT at 23%, we apply a rate of 13%, the price drops to around 17 cents. If we go down to 6%, obviously the drop will be even greater, nearly 28 cents”, he estimated, stressing that this tax has “a very big impact” on the price of fuels.

The latest calculations from the Directorate General for Energy and Geology (DGEG), concerning Monday’s prices, estimate the cost of a liter of simple gasoline at 2,028 euros and that of diesel at 1,979 euros. Since the beginning of the war, these prices have increased by 21.2 and 31.9 cents respectively.

Diesel price declines would be similar to those for gasoline – about 17 cents at the 13% rate and 28 cents at the 6% rate. In other words, everything suggests that, in diesel, even the minimum tariff will not bring the price per liter back to pre-war levels.

Oil still falling

This Wednesday, the price of a barrel of oil fell to 96 dollars, after hovering around 130 dollars a week ago. António Comprido underlines that the current situation is “volatile”, but considers that the last days have been “promising “. As such, he admits that the price of fuel will drop from Monday.

“What counts as a reference is the average price of the week,” he explains. “We continue to have a lower value in the price of oil and refined products and, for sure, this will be reflected in prices next week,” he pointed out.

And could oil come back up soon? António Comprido says that it depends, to a large extent, on the evolution of the war: “The more positive or more negative news about what is happening will be reflected in the financial markets and, obviously, also in the raw materials, to know oil,” he says.

The leader of Apetro, however, fears that the war has no end in sight, at least “in the coming days”. On the other hand, the fact that economic growth is revised downwards can reduce costs: “This will remove some pressure on the demand side, which will help not to increase the price of oil”, underlines- he.

The reduction in VAT on fuel depends on the European Union, which should decide between the 24th and the 25th. The leader of Apetro believes that there is “courage” in implementing this measure.

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