Govt wants to prolong fuel deal for 3 mos, slap export licenses

MOSCOW, Mar 21 (PRIME) -- The Russian government has suggested prolonging a mechanism of domestic market fuel price maintenance for April–June and is trying to convince the companies to introduce export licenses from July, Deputy Prime Minister Dmitry Kozak told reporters after a meeting on fuel market prices.

“We agreed that… for the period that we are elaborating this mechanism (of product export licenses), until it enters in force, we will prolong the agreement with the oil companies for one more quarter,” Kozak said, adding that the government will try to convince the companies in the need of export licensing.

The volume of the Russian market sales can be amended because of a rising spring demand for fuel, Kozak said.

On October 31, the government signed a price stabilization agreement with oil producers fixing the prices at the level of the end of May or early June until the end of 2018 and a later growth in line with annual inflation seen at 4.0–4.6%. The agreement will remain in force until March 31. Energy Minister Alexander Novak said in December that the government may prolong the deal.

Kozak said that the licensing is to be soft, “it does not restrict the amount of exports, only envisages license obligations of refineries to ship a certain amount of products to the domestic market so that the domestic market always has balanced supply.”

The government agreed to amend the mechanism of excises in the framework of tax maneuver to reduce the cut-off gasoline price to 51,000 rubles from 56,000 rubles and to adjust new diesel fuel price terms.

(64.2803 rubles – U.S. $1)

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