The mechanism for partial reimbursement of fuel costs has become the best way to mitigate the impact of rising fuel prices on the population. This was stated by the Minister of Economy, Environment, and Agriculture Oleksiy Sobolev during the hour of questions to the government.
This is reported by Finway
Reasons for Implementing Fuel Cashback
According to the minister, the government considered various approaches to reduce price pressure on Ukrainians. Lowering excise taxes, as some European countries have done, would lead to a reduction in defense funding. Price restrictions applied in 2022 would cause fuel shortages and disrupt market operations. That is why, as Sobolev emphasized, it was decided to implement the cashback mechanism.
“We considered various options to smooth the price shock for the population. Lowering excise taxes, as in some European countries, would reduce defense funding. Price restrictions would lead to fuel shortages and market distortions, as was already the case in 2022. Therefore, we chose the cashback option,” he noted.
Conditions and Features of the Program
From March 20 to May 1, Ukrainians can take advantage of the partial reimbursement program for fuel costs. A return of 15% of the gasoline purchase amount, 10% for diesel fuel, and 5% for autogas is provided. The maximum cashback amount is 1000 UAH per month.
The funds received can be used to pay utility bills, purchase Ukrainian products, medicines, books, or support the Armed Forces of Ukraine. According to Sobolev, about 75% of the spent funds are directed specifically to pay utility bills.
The minister emphasized that the program is targeted and designed to support those citizens who truly need it. He also refuted information about the widespread use of cashback by owners of expensive cars and stressed that the assistance is aimed specifically at the target audience.
Daily, in the first six days of the program’s operation, about 20 million UAH in cashback is accrued from the budget of the Ministry of Economy. According to preliminary estimates, approximately 3 million Ukrainians will participate in this program.