Page 12 - FSUOGM Week 19 2021

FSUOGM POLICY FSUOGM

Russia takes further steps to

stabilise fuel prices

RUSSIA RUSSIA’S government has taken further steps to increase has spilled into pump prices, with the
stabilise wholesale fuel prices following a steep price of gasoline having risen by 3.4% so far this
The spike in prices climb in rates in recent months that has put pres- year, and for diesel by 1.7%, according to statis-
has put pressure on sure on independent filling station operators. tics published by Rosstat.
independent fuel Under a decree approved by Russian Prime Authorities have taken several measures to
retailers. Minister Mikhail Mishustin, large integrated try to prevent any further price growth during
oil companies will be obliged to plan how much the summer months. The government adjusted
fuel they intend to sell on the St Petersburg Inter- the so-called damper mechanism in Russian oil
national Mercantile Exchange (SPIMEX) one taxation on May 1, to give suppliers more incen-
month in advance. tive to keep prices lower. Under this mechanism,
“The decision is expected to help avoid addi- suppliers must pay more into the budget when
tional price pressure on independent filling indicative domestic pump prices are higher than
station networks,” the government said on its export netbacks. Conversely, they can collect a
website on May 7. subsidy when the situation is reversed.
The decree also enables fuel supplies sold on In late April, the government also asked the
the exchange to be delivered via road transport energy ministry to prepare changes that would
instead of only by rail, in an effort to boost mar- enable a ban on gasoline exports to be swiftly
ket liquidity. enforced in the event of an emergency. Such a
“This will allow individual companies to ship ban is unlikely to be put in place, although the
even more petroleum products,” the government legislative move shows how seriously the govern-
said. “It also guarantees that the fuel sold on the ment is treating the situation.
exchange will reach the points where buyers pick Authorities have been gradually piling more
up the goods.” legislation on the fuel market over the years to
Wholesale fuel prices in Russia have risen in keep prices stable. High fuel prices in Russia, as
recent months on the back of increased demand in other countries, can result in a strong public
following a cold snap, seasonal maintenance backlash against the government.
and rising prices in Europe. This has eroded the The government introduced the damper
margins of independent fuel retailers, and led to mechanism after the 2018 price spike. In July
higher prices at the pump. 2020, after prices saw another period of growth,
In March, the energy ministry reported regulators raised the minimum amounts of gas-
that the price of AI-92 gasoline had reached oline and diesel that suppliers are required to sell
RUB55,750 ($756) per tonne at SPIMEX, sur- on the open market, to support independent fuel
passing a previous record set in May 2018. This retailers. ™

P12 www. NEWSBASE .com Week 19 12•May•2021