Report: Deputy PM: No need to extend oil market stabilization deal

ST. PETERSBURG, Jun 6 (PRIME) -- There are no prerequisites for prolongation of the oil market stabilization deal with local companies beyond July 1, Deputy Prime Minister Dmitry Kozak said in an interview with Rossiya 24 television channel on the sidelines of the St. Petersburg International Economic Forum on Thursday.

“Now, basing on the current situation and the government’s decision, the situation on the commodity exchange, on the market, basing on the global crude prices, there are no reasons, no prerequisites for prolongation of the agreement beyond July 1,” he said.

“The government and the oil industry have fulfilled their obligations. We agreed that the growth of (fuel) prices will not exceed inflation… We have prepared adjustments to the law, the Tax Code, adjustments to the damping mechanism that was introduced last year… and the revised mechanism allows us to say that we have met our obligations.”

In November 2018, the Energy Ministry, the Federal Antimonopoly Service, and 10 Russia’s largest oil companies signed an agreement on stabilization of the fuel market’s condition until March 31. The deal detailed prices and supplies of fuel in the retail and wholesale segments, and it also obliged oil companies to raise domestic fuel sales by 3% on the year in the period. In March, the deal was extended until the end of June.

In 2019, Russia started the final stage of the tax reform in the oil industry. The reform envisages a so-called damping mechanism aimed at holding down fuel prices on the domestic market while the fuel tax reform is finalized.

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