PRESS: Fuel union fears gasoline prices may grow by 14%

MOSCOW, Mar 23 (PRIME) -- The Independent Fuel Union believes that gasoline prices in Russia may rise by 14% and sent a letter to Prime Minister Mikhail Mishustin with a request to take urgent measures to stabilize the situation on the fuel market, Izvestia daily reported on Tuesday.

According to the Saint-Petersburg International Mercantile Exchange (SPIMEX), prices for the AI-92 and AI-95 gasoline increased by more than 18.5% from December 1, 2020 to March 17, 2021, reaching 53,600 rubles and 55,300 rubles per tonne, respectively, the daily said.

The union believes that additional fiscal incentives are needed to increase production of oil products, which will raise the attractiveness of supplies to the domestic market.

“A reduction in excise duties on gasoline and diesel fuel of the fifth ecological class could be such a measure. In 2018, there was already a precedent for such a reduction,” the letter said.

The union also believes it is necessary to cancel the damper. “Instead of smoothing out the influence of fluctuations in the external environment on the domestic market, it acts as a destabilizing factor,” it said.

Deputy Energy Minister Pavel Sorokin said the abolishment of the damper, which is designed to smooth out fluctuations in fuel prices, will deprive the market of a protective mechanism.

“One of the main priorities of the current damper mechanism is to maintain the rate of change in the final retail prices for the consumer not higher than the inflation level by compensating for the difference between the export alternative and the price of the domestic market. Cancellation will deprive the market of a protective mechanism,” Sorokin said.

“Since March 10, the situation at the exchange trading has been stable, the price growth at gas stations is within inflation. These measures are enough to maintain a stable situation, but the Energy Ministry continues monitoring for additional actions if necessary,” he added.

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