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What is happening with gasoline prices and what to expect next: More expensive in rubles, but cheaper in dollars

Date: June 22, 2024 Time: 08:14:22

A month ago disturbing news began to arrive about the increase in gasoline prices.

Photo: Oleg UKLADOV

A month ago disturbing news began to arrive about the increase in gasoline prices. In July, it was quoted on the stock exchange between 60 and 66 thousand rubles per ton, depending on the brand. And a week ago, the AI-95 set a new record on the St. Petersburg International Commodity and Raw Materials Exchange, exceeding 70 thousand rubles per ton. Now the price hike has reached retail. Rosstat reports that since the beginning of the year the price of gasoline has risen by 6.6% and during August by 1.7%.

Above all, prices, according to Rosstat, for the period from August 15 to 21, 2023, increased in the Republic of Kalmykia – by 2.9%. In Moscow, growth was 0.3%, in St. Petersburg – 0.5%. And that’s just in a week! (For national average prices, see “Specific”).

– The main reason for the increase in prices lies in the fact that more and more fuel is supplied abroad. Now it is very profitable – says Sergey Pikin, director of the Energy Development Fund.

According to experts, world demand is growing not only for oil, but also for petroleum products. Before, we exported approximately 10% of the gasoline produced; now that proportion has more than doubled. The main consumers are African countries, Türkiye and Southeast Asia. At the same time, the production of gasoline itself is not increasing, and a small deficit has formed on the domestic market (although the authorities deny this). This is where the prices go up.

“We add here the low exchange rate of the ruble against the dollar,” continues Sergei Pikin. – And, most importantly, a significant reduction in buffer payments (a mechanism that smoothes price fluctuations – Ed).

What does it mean? Earlier “KP” had already written that an increase in gasoline prices is expected in early autumn. Igor Yushkov, an expert at the Financial University of the Government of the Russian Federation, explained that from September 1, the state plans to reduce payments to oil workers under the reverse excise tax by 50%. With these payments, the government, as a rule, regulates gasoline prices so that they do not increase for the final consumer.

– The Ministry of Finance spends about a trillion a year on this; in the current situation, this amount seems astronomical, so they decided to cut it, – says Sergey Pikin. “This is what makes oil companies profit by raising prices.

Evgeny Kogan, General Director of the Moscow Partner Investment Company, author of the BitKogan Telegram channel, assures that additional reasons lie in the increased costs of oil producers working with imported equipment. After all, your service at the current dollar exchange rate costs a penny.

– Let’s not forget about inflation – says the expert. – Now it is slightly less than 5% and for this year around 6.5% is expected. Therefore, the increase in gasoline prices is justified. And if we recalculate the cost of our gasoline in dollars at the beginning of the year and now, we will understand that in general the price has gone down.

This, however, is not very encouraging. A dollar is a dollar, but in rubles the prices are rising.

– And they will grow, but not at a fast pace – Yevgeny Kogan assures us as much as possible. – Gasoline prices in Russia are under strict government control.

– And if the oil companies start raising prices, then the FAS will add to the situation, which will put them in their place – explains Igor Yushkov. – Then companies will release additional volumes of oil to the market to stabilize prices.


Photo: VALIULIN nail

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Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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