the Stock price of gasoline has increased since the beginning of may for 10%. This is bad news for large wholesale customers. At the end of April on the exchange the prices were below cost — refiners were trading at a loss. Most interesting is that these price swings has had almost no impact on the retail price at gas stations. In Russia the wholesale prices move with oil price, and retail — not. Blame the damping mechanism by which the government fills the budget at the expense of the oil companies. We found out how much it would cost gasoline at the pump without a damper.
Refiners have to sell on the commodity exchange 10% of gasoline. But the quota is temporarily changed from 1 may to 30 June, they must submit to the exchange, only 5% of petroleum products. In addition, the first half of may was a holiday — the shipment of the gasoline production was reduced, was less. Plus began to creep up the price of oil in early may, a barrel of Brent cost $26, now $30. All this has led to an increase in wholesale gasoline prices.
retail prices, those at the pump, it’s different. “The retail price is not the successor of the wholesale price as it works with any other product. The formation of wholesale prices are closer to market principles. If oil rises, stock prices for gasoline, too, and Vice versa. Retail prices are regulated manually by the state through the damping mechanism,” — said the President of the Independent fuel Union Pavel Bazhenov.
the Damper is a tax deduction, which stimulates the oil companies to sell gasoline in the domestic market, not to drive the export. The mechanism became operational in 2019, when oil prices were high and the export trade was profitable. The difference between export and domestic prices was compensated by the government. But there is another side of the damper, a very bad oil: when oil prices are low, the difference to the budget list they. As it is today. Raising prices on the wholesale market, oil companies are trying a little to compensate for their losses.
in addition to payments on the damper oil needs to transfer a large amount of taxes on mineral extraction, profit, excise taxes. Ultimately the tax burden is passed on to the consumer. “Because of the tax burden on the oil industry formed a price vise: the retail price is not subject to market rules, the wholesale price is taxed. Permanent cost containment is harmful to the fuel infrastructure, adds Pavel Bazhenov. The damper does not give wholesale prices to decline and kills the hope for lower prices in retail. Suffering oil industry, business, consumers. The only beneficiary is the budget. If not for the damping mechanism, fuel prices were reduced after global crude oil prices. I think we would see a reduction in price of gasoline by 3 rubles per liter”.
it Turns out that designed to restrain the growth of fuel prices the damper restrains and mitigation that would feel great right now affected by the crisis economy. “The gradual removal of restrictions of a mode of isolation, people started to travel more. Hoping for increased demand, oil companies raised prices. Therefore, the rise in fuel prices in retail is practically guaranteed. Cancel the damping mechanism would allow the refinery to receive large profit that would hold the growth of retail prices. But the government is not taking care of the budget”, — said the head of analytical Department AMarkets Artem Deev.
To “on” damper, the price of gasoline moved along the trajectory of oil prices. In the US and Europe as there is now. But Russia went the other way. “If the mechanism of the damper and will be revised only when the economy starts to recover, but certainly not in 2020. Viable option for regulating the prices of petrol instead of the damper is to oblige the oil companies to meet the demand for fuel in Russia 101%. This will improve competition on quality and competition for customers in the domestic market”, — said the head of Department of investment strategy “BCS” Valery Kosanin.
“it is Possible that instead of the damper will be proposed increased export duty, but how will this affect the domestic market, it is difficult to imagine,” — said Artem Deev.
Experts agree that retail gasoline prices need to return to the market pricing, thus to develop the economy. When Russia will prosper the business, to open a new company, incomes will rise, to sell gasoline in the domestic market will also be profitable, and do not need any damper.