The prices of liquefied petroleum gas will depend on the international prices and the ruble exchange rate

11 july 2018 | Rossiyskaya Gazeta

The Rossiyskaya Gazeta writes that the price of natural gas motor fuel has soured, citing Federal Statistics Service data: in the last month alone the price of natural gas motor fuel in Russia jumped by 7.1%, with the price per liter being close to 23 rubles. Under natural gas motor fuel the Federal Statistics Service means all types of liquefied petroleum gas (LPG).

Alexander Amiragyan
Alexander Amiragyan
Department for Fuel and Energy Sector

"In April the price of LPG went up by 1.2%, in May it jumped by 7.7%. In total, between May and June the retail prices went up by 15% or 2-3 rubles per liter," Alexander Amiragyan, Deputy Head of the Department for the Fuel and Energy Sector of the Analytical Center, confirmed in an interview with a Rossiyskaya Gazeta correspondent.

Speaking about the causes of this sharp increase in price the expert mentioned a sharp hike in wholesale prices which almost doubled in March through June, hitting a high of 29 thousand rubles per tonne. "Such a significant increase in the wholesale prices has resulted from a rise in LPG prices in the international markets that followed the prices for oil and petroleum products (for Russian LPG it is the EU that is important because that is where Russian LPG gets imported to) coupled with a sharp drop in the ruble exchange rate in April. These two factors drove up the net back price for LPG in Russia, which equals the price less transportation costs and export tariffs. LPG is an export commodity and so the volatility in prices in the international markets impacts the domestic prices," Mr Amiragyan explained.

Recently, LPG prices have been very volatile. While in the first six months of this year they were growing, in the same period of 2017 they were falling (in Moscow they fell by 2-3 rubles per liter) due to a seasonal decline in demand and the appreciation of the ruble, Mr Amiragyan said. Currently, filling stations that sell LPG are hardly making any profit off it while producers are offering high discounts on wholesale sales.

The further changes in LPG price will depend on its prices in Europe and the ruble exchange rate, Mr Amiragyan believes.

Source: The Rossiyskaya Gazeta

Photo: From open sources