Page 112 - RusRPTJul21

approved technical and economic analysis and the progress in developing the project’s feasibility study scheduled for completion by the end of this year were discussed," Gazprom said.
Denmark revokes construction permit for the Baltic Pipe project. The pipeline is designed to carry gas from the Norwegian shelf to Poland, Vedomosti. Removal of a direct competitor for Gazprom in Poland is +ive. If this decision stands, it will remove a potential direct competitor to Gazprom for the Polish market. The 10bcm line was to begin construction this summer and have entered service in late 2022, and was intended to diversify Poland away from Russian pipeline gas and expensive LNG.
The Russian authorities are preparing a package of radical measures to cool the domestic gasoline market, where prices have skyrocketed at double-digit rates in wholesale and retail prices are growing 1.5 times faster than inflation.
Deputy Prime Minister Alexander Novak, who oversees the energy sector, held a meeting on the fuel market in mid June, where they discussed the possibility of concluding agreements with oil companies by analogy with 2018, the head of the Russian Fuel Union (RTS) Yevgeny Arkusha told Interfax.
In November 2018, the government actually froze prices, banning oil companies and refineries from selling gasoline and diesel fuel at prices exceeding last year's level by more than 3%.
As compensation, the oil workers received a damping mechanism - the budget had to pay them the difference between export prices and domestic prices, covering the lost profit for the fact that gasoline is sold cheaply in Russia, and not dearly abroad. This mechanism still works: for example, in March, oil workers received 16.6bn rubles from the budget for a damper and another 46.9bn through a reverse excise tax. But it is not possible to contain fuel inflation, which is embedded in the cost of all goods and services.
Over the six months, exchange prices for AI-92 jumped by 20.8%, and for AI-95 - by 27.5%, while retail prices grew only by 6% and 7%, respectively (according to the RTS).
The press service of the government confirmed that Novak instructed to work out the mechanisms of "multilateral agreements with fuel companies to maintain a certain price level.”
Moreover, "freezing" is supposed for both the wholesale and retail markets.
112 RUSSIA Country Report July 2021 www.intellinews.com