PRESS: Oil firms want to adjust fuel price damping mechanism

MOSCOW, Feb 18 (PRIME) -- Oil companies want to change the damping mechanism aimed at smoothing oil prices fluctuations on the domestic market to reduce payments to zero at the oil price of U.S. $60–65 per barrel, Kommersant business daily reported on Monday.

The proposal was made at a meeting with Deputy Prime Minister Dmitry Kozak on February 11. It envisages payments to companies if the oil price is above the range and of the companies to the budget if the price is lower.

The mechanism was introduced to compensate for the difference between local and export prices to the companies. In January–February, the producers sold gasoline with a 3,000–10,000 ruble discount on the domestic market and made extra payments to the budget as the export price was relatively low. Diesel fuel was sold with a premium to the market price, and the companies will receive extra payments from the budget for the period.

A source told Kommersant that the proposal will be negotiated again this week. Kozak’s representative Ilya Dzhus said that no final decision has been made yet.

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