Govt, oil cos agree on measures to stabilize fuel prices until March 31

MOSCOW, Nov 1 (PRIME) -- The Energy Ministry, the Federal Antimonopoly Service, oil companies, and independent oil refineries have agreed on measures to stabilize fuel prices, which will come in force from Thursday through March 31, Deputy Prime Minister Dmitry Kozak told reporters late on Wednesday.

“The Energy Ministry and the service have prepared draft agreements with all vertically-integrated companies and independent oil products producers that set supply volumes under the historic principle as well as indicative wholesale prices in different segments of the wholesale market. We’ve agreed with all oil companies that they will start complying with the agreement immediately from this day,” he said.

The companies now have 24 hours to introduce all necessary corporate procedures. The agreement will be in effect until March 31, 2019, he said.

The deal fixes fuel wholesale prices at the level of June 2018, and encompasses a further price growth in line with inflation in 2019, no faster than by 4–4.6% a year and without serious changes, he said.

“The sides have agreed that all vertically-integrated oil companies and all independent refineries undertake the obligation to supply gasoline and diesel fuel at the level of a corresponding month of 2017 plus 3%. Wholesale prices should be fixed at the level of June 2018. We have fixed wholesale prices, and they agreed to do it,” he said.

The government still discusses a proposal to oblige oil companies to transfer 17.5% of oil they produce to the Russian refineries, as the efficiency of the measure is questionable. The ministry, the service, and oil companies also agreed not to enforce the antimonopoly service’s order to oil companies to raise exchange sales of fuel until the fuel price deal expires, Kozak said.

The government is not discussing a transfer of obligations to pay excises from refineries to fuel filling stations, as the measure needs further analysis, he said.

He also said that a government order to raise production and sales of oil products by 3% on the year each month would not be applied to the Far East as the region is not capable of such an increase and demand there covers everything that local refineries produce.

Energy Minister Alexander Novak said that the agreement would allow the authorities to keep wholesale prices at bay, to maintain retail prices, and to support profitability of fuel filling stations at a necessary level.

A representative of oil major Rosneft said that the company had already signed all the documents on the agreement and had sent them to the government.

The New Stream group of companies supported the agreement and joined it, a representative of the company told PRIME.

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