New Pricing Principles are to Apply in the Fuel and Energy Sector

4 april 2018

The Analytical Center has released a new bulletin on the pricing policy in the fuel and energy sector. The authors write that the Federal Anti-Monopoly Service of Russia was suggesting reforms for the price regulation and the development of competition in the fuel and energy sector directly affecting the universal pricing principles. Russia has long been debating the usefulness of deregulation because of the uneven technological development in different regions. However, work is already underway to systematize the pricing regulation through a single legislative framework.

Further development of competition in the fuel and energy sector assumes approval by the FAS of Russia of investment programs proposed by regulated entities while taking into account the position of consumer councils. According to experts, this makes the coordination of development and investments an extremely challenging task while the industry needs to improve its efficiency and modernization. More clearly defined guidelines should offer a framework for competition and coordination.

The bulletin covers the current situation with different types of fuel. Thus, in March the oil prices were being affected by the uncertainty in the market brought about by the rising production in the US and the future global demand, as well as the risks of problems with deliveries. In Russia, oil production and exports declined by 1.4% by 2017 in February. In February and March gasoline prices remained unchanged while the price of diesel fuel declined for the first time in 10 months. The bulletin also has detailed sections on natural gas, coal and electricity.

The Analytical Center experts talk about the Russian fleet of ice breakers. According to them, the potential increase in the maritime shipments of energy resources coupled with the development of the Northern Sea Route may result in a shortage of ice breakers.

The bulletin also covers the crisis in the oil industry of Venezuela. The authors believe that the fall in Venezuelan oil production below the target quotas would afford the OPEC more flexibility in what to do next.

For more see the bulletin Pricing Policy in the Fuel and Energy Sector.

For the other energy bulletins see Publications.