Russian Government is discussing measures to curb gasoline prices - RBC

UFA, 26 October 2018. /Bashinform News Agency/ translated by Tatiana Aksyutina/. The Government of the Russian Federation is discussing with the oil industry measures to curb fuel prices, recognizing the “unstable and tense” situation in the fuel market due to ruble jumps and oil prices, RBC reports about it.

After a sharp spring rise in gasoline prices, which President Vladimir Putin had to deal with, the leaders of the largest oil companies agreed in late May to freeze gasoline prices. The Government in response to this reduced excise taxes on gasoline and diesel. But the owners of gas stations could not constantly keep prices on the background of rising oil and expectations of excise growth since January 1, 2019.

Experts believe that by the end of the year prices for fuel at gas stations will increase by 2-3 rubles per liter, and the Government will gradually release prices now to avoid explosive growth in 2019. Other sources claim the opposite: now the Government’s efforts are aimed at “gently entering January” with low prices.

The main mechanism of price containment is a budget subsidy (almost fully compensate for the increase in excise). Even the introduction of protective duties on petroleum products in the event of a sharp rise in prices in the domestic market was considered, but experts strongly opposed it. A new measure is discussed now: to oblige refineries to supply a certain amount of fuel to the domestic market in exchange for the right to export petroleum products, which will be issued in the form of a license.