In December, gasoline prices at US gas stations became cheaper than in Russia, reaching a four-year low. The average price for a liter of the US equivalent of AI-92 gasoline is currently 60.1 rubles, while in Russia, according to Rosstat data as of December 1, the price for this grade was 61.68 rubles per liter. Whether we should urgently reform our fuel market in response to this comparison is a significant question. It is essential not to overlook the word "dropped" in the previous paragraph, which indicates that prices had been notably higher and may rise again. Moreover, when it comes to American gas pricing, there can be no talk of price regulation or comparisons with cheaper fuel in Venezuela or Mexico. It is a market operating solely based on economic principles, with no discussion of social responsibility. In the US, gasoline prices are influenced by multiple factors, primarily oil prices and demand for fuel. Currently, oil prices are relatively low, and demand in the US is stagnating, leading to a decrease in prices. In 2022, during a period of higher prices, the Russian equivalent of AI-92 gasoline cost an average of 102 rubles per liter in the US (based on the current exchange rate). Similar to Russia, the price of fuel in the US varies significantly by region, but the spread in our market ranges from 10-30%, while in the US it can reach up to 90%—the cheapest gasoline is currently in Oklahoma (48 rubles per liter of the AI-92 equivalent), while the most expensive is in California (90 rubles). Another point, which has seemingly gone unnoticed, is that the average price of the US equivalent of AI-92, called Regular or AKI 87, is now lower than in Russia. However, the US equivalents of AI-95 (there are two types) remain pricier. This situation also has an alternative side. We cannot ignore the fact that our domestic fuel prices have already matched those in the US. Our challenge lies in the long-term outlook: for periods of a year or more, gasoline prices in Russia may only continue to rise. In Russia, oil prices exert only a secondary influence on fuel costs; taxes and excises carry the primary weight. As noted by Yuri Stankevich, Deputy Chairman of the State Duma Energy Committee, the proportion of taxes in gasoline prices—both wholesale and retail—has confidently surpassed 70%. Indirect taxes (VAT and excises) account for over 40%. For instance, given the current prices and the increase in excise rates from the new year, the excise tax per liter of AI-95 gasoline sold at gas stations will amount to 13 rubles. Sergey Tereshkin, General Director of the fuel market place OPEN OIL MARKET, compares this with data from the US Department of Energy for October 2025, where the share of crude oil in the retail price of gasoline accounted for 49%, while refining costs constituted 14%, marketing and distribution made up 20%, and taxes represented 17%. In the US, there is a retail sales tax that does not exist in Russia; however, VAT in Russia transcends generations, being collected throughout the entire sales chain, from producer to end consumer, clarifies Dmitry Gusev, Vice Chairman of the Supervisory Board of the "Reliable Partner" association and a member of the expert council for the "Gas Stations of Russia" competition. Meanwhile, oil extraction taxes remain at maximum levels. Currently, if we don’t alter taxes, there is no room for maneuver within the fuel market. Tax payments are unavoidable and will continue to rise (excises), operational costs are minimized, and oil price volatility has almost no impact on pricing since their contribution hardly exceeds 15% of gasoline costs. Additionally, inflation plays a role in attempts to stabilize prices at gas stations. As a result, gas stations have no choice but to gradually raise prices in a steady manner to achieve acceptable economic indicators. According to Gusev, as long as our fuel prices are linked to external (export-oriented quotations), they will be programmed for growth. Deflation is not anticipated, and moreover, low inflation is considered the optimal scenario. This means that fuel prices will continue to increase. The price growth is moderated by a damping mechanism (financial compensations to oil producers from the budget for supplying fuel to the domestic market at prices lower than export prices covering the difference between them), but as taxes and production costs rise, its influence diminishes. It is also worth noting that this damping mechanism prevents prices from dropping when oil quotations fall, as the level of budget compensations decreases. If prices for petroleum products abroad (as we are oriented towards the European market) fall below those in Russia, the damping mechanism works in reverse—oil companies pay into the budget, making it impossible to lower prices. A positive aspect of this arrangement is that there cannot be a steep increase in the prices of gasoline or diesel. As Stankevich emphasizes, the upward trend in fuel prices is an entirely managed process by the state through tax and excise policies, market pricing mechanisms, and administrative directives from the federal headquarters overseeing the situation in the fuel market. In his view, we should not compare our prices in absolute terms with the situation in the US or other countries, but instead focus on the purchasing power of the population. However, the current policy appears aimed at promoting continuous growth in citizens' welfare. Unfortunately, we still observe scenarios where countries with significantly higher gasoline prices experience average per capita income levels that enable greater fuel purchases. In December, despite a slight drop in retail prices, the rise in gasoline prices in Russia has more than doubled inflation since the end of last year. According to Rosstat, the average increase stands at 11.2% compared to 5.27% as of December 1. By the end of the year, gasoline prices at gas stations may decline slightly, but they are unlikely to align with the average growth of consumer prices in the country. Amidst this context, ideas have emerged regarding the introduction of state regulation of retail fuel prices, similar to practices in Venezuela or Iran. However, as Tereshkin points out, such a directive pricing model is unlikely to be viable in Russia. This approach would not be profitable for companies. Fuel producers should not operate at a loss, and the regulator's objective is to ensure that suppliers can profit while consumers purchase gasoline at accessible prices. Source: RG.RU