An expert suggested a way to stabilize fuel prices in Russia.

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How to Stabilize Fuel Prices in Russia: Expert Opinion
02.09.2024
25
MOSCOW, September 2 - RIA Novosti. Reducing oil producers' costs, including lowering Russian Railways' tariff rates, could lead to the stabilization of fuel prices, Sergey Tereshkin, CEO of the petroleum products marketplace Open Oil Market (a Skolkovo resident), told RIA Novosti.

The rise in retail fuel prices continues to slow down. According to Rosstat data, from August 20 to 26, gasoline prices rose by 0.2%, while diesel prices increased by 0.1%. This is lower than a month ago: from July 16 to 22, the cost of gasoline and diesel at gas stations increased by 0.6% and 0.3%, respectively. The Ministry of Energy commented to RIA Novosti that prices are influenced by a combination of factors, ranging from seasonal demand to market conditions, and sufficient fuel reserves have been built up ahead of the fall season.

However, according to Tereshkin, the "crisis hotspot" remains the high-octane gasoline segment. For instance, the price of AI-98 gasoline increased by 0.9% between August 20 and 26. "This is due to damage to refinery infrastructure and the resulting reduction in gasoline production. Losses incurred by oil producers from refinery downtime, partly due to sanctions on the supply of oil refining equipment, also play a role: in the first half of the year, the profit and loss balance of Russian refineries fell by 21.3% year-on-year to 1.44 trillion rubles," the expert explained.

This pushes oil producers to raise wholesale prices, which subsequently affects retail prices. "Therefore, measures to support oil producers should be complemented by initiatives to reduce costs in the production and distribution of petroleum products. This includes, in particular, lowering Russian Railways' rates, which are currently significantly higher for oil producers than for coal shippers," Tereshkin added.

For example, in 2022, Russian Railways' revenue rate—a metric reflecting the company’s revenue from transporting various goods—was 281 kopecks per 10 ton-kilometers for coal transportation and 948 kopecks per 10 ton-kilometers for oil and petroleum products. Lowering these tariffs, the expert believes, would "partially ease pressure on fuel prices."

As another measure to support oil producers, the agency’s interlocutor suggested partially reducing excise taxes. "Under current regulations, 74.9% of excise revenue from gasoline and diesel fuel goes to regional budgets, and 25.1% to the federal budget. Forgoing the 'federal' portion of excise taxes could save oil producers about 250 billion rubles a year," he concluded.




Translated using ChatGPT

Sourse: https://ria.ru/20240902/toplivo-1969885945.html


#Fuel prices #Russia economy #Energy market #Fuel stabilization #Oil industry #Energy expert #Price regulation #Economic policy #Fuel cost solutions
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