Ukrainian Prime Minister Yuliya Svyrydenko announced that the government is contemplating a gradual increase in freight tariffs. This plan includes a 30% rise starting August 1, 2026, and an additional 15% increase on January 1, 2027. According to Svyrydenko, this approach aims to find a compromise following discussions with industry stakeholders, as an initial proposal suggested a one-time increase of 45%.
Business representatives are voicing strong objections, arguing that the financial difficulties faced by the state-owned carrier, Ukrzaliznytsia, should not be addressed at the expense of freight shippers. Reports indicate that since 2012, shippers have overpaid Ukrzaliznytsia by approximately 200 billion UAH due to the lack of necessary reforms within the company.
“The 200 billion UAH represents the cost of superficial reforms. The freight sector has long acted as an ‘endless wallet’ from which all structural issues of the railway monopoly were patched up,” stated Oleksandr Kalenkov, president of the Ukrainian Metallurgical Industry Association (Ukrmetalurhprom).
The European Business Association has urged the government to reconsider the sharp increase in tariffs, suggesting that the economic justification for such a decision requires further analysis. They warned that the negative impacts might outweigh the anticipated financial benefits for Ukrzaliznytsia. The association proposed capping the increase at 5-10% following open consultations with the business community.
Agricultural associations have also expressed opposition to the significant tariff increases. The Ukrainian Agribusiness Club predicts that this could raise the cost of grain transportation by $4-7 per ton, potentially leading to lower purchase prices for producers. Additionally, some freight may shift to road transport, which could further burden already stressed highways.
Vladimir Shchelkuno, president of ICC Ukraine, commented that in the current wartime context and under a negative trade balance, decisions that harm the competitiveness of Ukrainian exports create added pressure on the currency market. He believes that, considering Ukrzaliznytsia’s financial needs, a tariff increase of no more than 15% would be economically justified.
Furthermore, calculations from State Enterprise Ukrpromzovnisexpertiza suggest that a 37% increase in freight tariffs could result in a GDP loss of 96 billion UAH annually, a decrease of 27 million tons in the carrier’s freight base, a loss of $2.4 billion in export revenue, and a reduction of 36 billion UAH in budget revenues.
