In 2014, there is no reason for motor fuel price increase to stop or significantly speed up.

23 october 2013 | Nezavisimaya Gazeta

The Russian Fuel Union and Arkady Dvorkovich, the Deputy Prime Minister, voiced similar predictions about the rate of petrol price increases in the coming year.

Alexander Kurdin
Alexander Kurdin
Department for Fuel and Energy Sector

Alexander Kurdin, Head of the Directorate for Strategic Studies in Energy at the Analytical Center, told Nezavisimaya Gazeta that he saw no reason why motor fuel prices, which had grown in recent years by 5–10%, would stop or significantly accelerate. According to the expert, the increased costs of producers, due to a general increases in prices, will contribute to the growth of motor fuel prices. In addition, plans call for increasing excise duties on 4th and 5th grades of petrol by 5–10%, and the tax on extraction of commercial minerals by 5%.

However, according to Mr. Kurdin, these dynamics could be changed by means of a principal tax adjustment or foreign trade policy in the oil sector, or the advancing process of upgrading of the oil refining industry. “However, the first factor is not observed, while the latter is not sufficiently pronounced. At the same time, the pricing of petroleum products in the domestic market can hardly be called competitive, and the participants’ expectations of a ‘politically acceptable price corridor’ can play an important role. Now, after the Deputy Prime Minister’s statement, it is likely that these companies will adapt to these expectations”.