A committee from the Ukrainian Parliament has recommended that the Cabinet of Ministers keep freight tariffs for state-owned railway operator Ukrzaliznytsia unchanged through 2026. This decision follows discussions about the potential negative impacts of increasing tariffs on the country’s industrial sector.
Participants in the discussions expressed concerns that raising tariffs could critically affect industries such as metallurgy, mining, chemicals, and construction materials, all of which are already grappling with challenges related to the ongoing energy crisis, labor shortages, rising costs, and the repercussions of the war.
Since 2021, tariffs for transporting key goods like coal, ore, and limestone have surged by 2.4 times, while the rates for empty wagons have increased by 2.6 times. Experts warn that any further increases could push some enterprises into unprofitability.
According to calculations presented by the State Enterprise Ukrpromzovnishekspertyza during the hearings, a 37% hike in freight tariffs could result in a loss of approximately 100 billion UAH in gross domestic product, a decline of 98 billion UAH in foreign currency earnings, and a decrease in budget revenues exceeding 36 billion UAH.
This situation could also lead to the elimination of over 76,000 jobs, including 26,000 in the industrial sector.
During the hearings, it was emphasized that Ukrzaliznytsia plays a vital role in transporting raw materials, components, and finished products for Ukraine’s industrial complex, accounting for about 60% of domestic and international freight transport.
However, the company faces significant challenges in its passenger transport segment, reporting a loss of 7.3 billion UAH in the first half of 2025. The freight segment remains profitable, which helps offset losses from passenger services.
Participants noted that the practice of cross-subsidization, where profits from freight transport are used to support passenger services, does not align with international standards. In many developed countries, passenger transport is funded through government budgets, ensuring the competitiveness of freight services.
The committee has urged the government to develop a long-term funding mechanism for covering losses in passenger transport and to allocate appropriate budget resources. Additionally, lawmakers recommended creating conditions to enhance Ukrzaliznytsia’s operational efficiency through cost optimization, the implementation of automated technologies, and developing a program to boost the company’s competitiveness.
Other recommendations include facilitating amendments to the state budget to provide financial support to Ukrzaliznytsia exceeding 26 billion UAH to ensure uninterrupted passenger services, transport humanitarian cargo, and manage evacuation logistics.
It is worth noting that Ukrzaliznytsia had previously sought to increase freight tariffs by 40% to cover losses from its passenger operations, which have reached 22 billion UAH. However, this proposal faced opposition from the Ministry of Economy, Environment, and Agriculture, as well as representatives from the business sector.
A Ukrainian parliamentary committee has advised the government to keep freight tariffs stable through 2026, citing potential economic risks from increases. The discussion highlighted the challenges faced by various industries and the financial struggles of Ukrzaliznytsia's passenger services.