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Business Calls upon Government to Refrain from State Regulation of Market Principles

Business Calls upon Government to Refrain from State Regulation of Market Principles

The business community, united by the American Chamber of Commerce in Ukraine (AmCham Ukraine), acknowledges the importance of taking certain additional measures to protect the health of Ukrainian citizens during the quarantine period. However, the state regulation on purely market principles introduced by the Resolution of the Cabinet of Ministers of Ukraine #450 as of March 29, 2021 (Resolution #450) will neither contribute to establishing a free, open, transparent, and competitive fuel market nor provide additional social and economic guarantees in relation to the spread of coronavirus disease (COVID-19).

Limiting the competition on the fuel market, Resolution #450 discriminates against retail fuel market players, international investors whose companies are not vertically integrated in Ukraine. Lacking influence on the wholesale markup, such market players are put at a disadvantage compared to companies that have access to and control over the entire value chain. Besides, in the absence of competition and having an acute consumer demand for retail petroleum products, "shadow operators" can increase the volume of illegal petroleum product sales, manipulate prices and continue tax evasion.

AmCham Ukraine member companies' experts point out that the unpredictability of Ukraine's regulatory policy without proper consultation and careful consideration or proper assessment of the impact of such measures is a negative signal to international investors. Leveling the role of the market as the main regulator of economic relations and economically unsound state interference in economic processes by introducing state regulation of petrol and diesel prices will cause the index of Ukraine's investment attractiveness to decline.

AmCham Ukraine calls upon the Government to cancel the declaration of fuel prices and refrain from making decisions that would directly threaten Ukraine's investment climate.

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