Vladimir Bobylev: “It is difficult to reduce prices at filling stations by administrative methods”

“The popular opinion that it is enough to gather monopolists for a meeting and order them to mark the prices at filling stations down is mistaken” – the deputy General Director of the consulting company “Russian Petroleum Investor” (RPI) Vladimir Bobylev said, commenting the information about the rise of fuel prices at Bashkir filling stations – “Sure, they’ll answer “Yes!” and will cut the prices at their filling stations down but at that the wholesale prices will remain on the same level and that adversely affects the profitability of small networks and the purses of final consumers first of all”.

As M-r Bobylev explained, the vertically integrated oil companies can take their margin not only from the retail prices at filling stations but also from the wholesale sales, from export and from oil trade in a whole. Unlike the vertically integrated companies the small networks have no chances to redistribute both unprofitable and profitable flows; they either earn at filling stations or break.

As for the solution of this problem, the state has additional measures for regulation of the fuel markets – such as the rise of duties – it will cut the attractiveness of oil export down and will push the companies to the increase of the oil deliveries for the Russian refineries”.

But in opinion of RPI representative the procedure of the rise of duties is rather attractive because of its simplicity – it is enough to issue a corresponding decree – but it is unlikely to be efficient.

“It is not the fact that raising the load on the refineries the companies will produce more benzene” – Bobylev said – “Because the export of diesel fuel and black oil still remains quite profitable”.

The expert believes that development of the exchange trade and formation of well-balanced taxation mechanism for the branch is the right way to formation of fair internal retail fuel prices.