Despite legislative decisions aimed at supporting farmers through reduced fuel excise taxes, Ukrainian agricultural producers have yet to benefit from the promised mechanism for lowering their tax burden. As a result, farmers continue to operate under significantly less favorable conditions than their European counterparts, where reduced excise rates for agricultural producers have long been standard practice.

This was emphasized by Mykola Pyvovar, farmer and Board Member of the Ukrainian Agri Council (UAC), during his speech at the ENERGY Finance 2026 forum.

According to Pyvovar, in 2024 Ukraine adopted Law No. 3878, “On Amendments to the Tax Code of Ukraine Regarding the Implementation of European Union Legal Provisions on Excise Taxation,” which provided for the introduction of a 0.5 reduction coefficient for fuel excise taxes applied to agricultural producers. However, the government has yet to develop and submit the additional legislation necessary to implement this provision.

"At present, the excise tax amounts to €250 per 1,000 liters of fuel, and by the end of 2028 it is expected to increase to €330. Meanwhile, the average excise rate for farmers in European countries is approximately €70 per 1,000 liters, and in some countries it is as low as €29. These figures are simply incomparable. The law was adopted, and the government was supposed to prepare the necessary legislation introducing the reduction coefficient, but in practice the process has stalled," Mykola Pyvovar stated.

He added that the UAC has repeatedly drawn the government's attention to the need to fulfill its commitments, as fuel remains one of the key components of agricultural production costs.

During a sectoral discussion at the ENERGY Finance 2026 forum, representatives of the fuel market expressed concerns about potential abuse should a preferential excise tax regime be introduced. In particular, they pointed to the risk of fuel being used for purposes other than those intended under the program.

At the same time, the UAC maintains that the issue lies not in the concept of reduced excise taxation itself, but rather in the absence of effective state oversight and administration of the mechanism.

"The key issue is proper administration of the process. If the state ensures effective control over fuel use, the mechanism will function properly. Today, we are effectively being told that because of potential risks of abuse, the reduced coefficient should not be introduced at all. But that raises an obvious question: why does this system work in European countries? They also have monitoring systems, registries, and liability for violations, and these mechanisms allow farmers to purchase fuel under preferential conditions. The problem is not the absence of workable solutions but rather the lack of adequate oversight and implementation of existing decisions," the UAC Board Member emphasized.

The UAC stresses that agricultural producers expect the Cabinet of Ministers to take concrete steps toward resolving the fuel excise tax issue and implementing the mechanism already предусмотрed by Ukrainian legislation.