The increase in freight tariffs by Ukrzaliznytsia may harm Ukraine’s economy
Volodymyr Husak, General Director of the Federation of Transport Employers of Ukraine, expressed concern about Ukrzaliznytsia’s plans to increase freight tariffs by 45%. Such a move could significantly impact the national economy.
The tariff increase, planned from 2026, could lead to reduced production, loss of billions in state revenues, and devaluation of the hryvnia. Husak notes that Ukrainian businesses are already operating under extremely challenging conditions due to the war, logistical issues, and a shortage of energy resources and workforce.
Despite the profitability of Ukrzaliznytsia’s freight segment, including an operating profit of about 20 billion hryvnias annually in recent years, the company’s problems lie in the unprofitability of passenger transportation. Losses in this segment are forecasted to reach 26 billion hryvnias by 2026.
Husak warns that increasing tariffs may lead to further reductions in rail freight volumes, which have already fallen by 50% since pre-war times. This threatens industrial losses, decreased foreign exchange earnings, and reduced tax revenues.
The Federation of Transport Employers has already approached the Cabinet with proposals for alternative financial stabilization solutions for Ukrzaliznytsia without negatively impacting the economy. It is important for Ukraine to find ways to support production and exports that do not create new risks in times of war.
| Year | Freight Segment Profit (billion UAH) | Passenger Segment Loss (billion UAH) |
|---|---|---|
| 2023 | 20 | -26 |
| 2024 | 20 | -26 |
