Continued Tax Maneuver in Oil Industry Is Driving Up Gasoline Prices

10 january 2017 | Rossiyskaya Gazeta

Despite fears, gasoline prices went up only in a few regions during the New Year holidays, while countrywide they remained at the level seen in the late December. Experts believe that in 2017 the rise in gasoline prices will remain within the inflation rate, which the Bank of Russia projects at 4%.

Alexander Kurdin
Alexander Kurdin
Department for Fuel and Energy Sector

"On the one hand, the prices are being driven up by the continued tax reform in the oil industry: export tariffs on oil are being reduced and that is naturally driving up gasoline prices in the domestic market, provided that all the other conditions remain unchanged," Alexander Kurdin, Head of Research at the Department for the Fuel and Energy Sector of the Analytical Center, commented on the situation for the Rossiyskaya Gazeta. In addition, the global oil prices are going up as well. The last factor, however, is traditionally accompanied by the ruble strengthening, which in its turn stabilizes the ruble denominated oil prices, the analyst noted. It should be noted, though, that the ruble exchange rates are showing the evident signs of independence and growing resistance towards the volatility of oil prices, the expert specified.

"The Federal Antimonopoly Service’s efforts ensure that some kind of collusion between oil companies is highly unlikely. However, in the spring, we are expecting the seasonal spike in demand which can drive gasoline prices up again," Mr. Kurdin said.