The Ministry of Finance: export duty on fuel can be up to 90 %

8 June 2018

Will it be able to stop the growth in retail prices?

Despite the government measures fuel prices continue to rise. Against the background of rapid price increase of fuel excise duties was reduced from 1 June, but even that is not stabilized the market. And although the authorities claim that the issue is resolved, constantly changing the price tags at the gas station talking about something else. Now the Finance Ministry has proposed another method of influence on the situation — to raise the export duty on fuel up to 90 %.

As reported TASS, the Director of the Department of tax and customs policy of the Ministry of Finance of Russia Alexey Sazanov told about the proposal to empower the government to raise export duties on oil products to 90 % from the duty on oil, if necessary to curb rising gasoline prices.

While we are talking only about the bill, while it describes only the possibility of raising export duties. In other words, in this case only describes the powers of the government, which it may use or may not use. While the rhetoric of Alexei Sazanov, it becomes clear that such a measure is discussed only in the event of another jump in prices, so the current level is formally considered quite adequate.

The duties on oil and oil products are set monthly depending on oil prices. As of June 1, they were set at $131,8 per ton. The rate on exports of light oil and gasoline is was much lower: it is only 30 % of the export rate of oil, i.e. us $39.5 per ton.

At first glance, the export and domestic prices are not directly connected. But increasing the attractiveness of oil and its derivatives abroad is one of the key causes of the observed market price increases.

"Straight line" with Vladimir Putin

At a meeting held June 7, a "Straight line" with Russian President Vladimir Putin raised the issue of fuel prices. Authorities believe that the culprit of the current situation are the oil companies that increased their exports to the detriment of the supply of the domestic market. The government encourages oil companies to fix retail and wholesale prices, and as one of the possible penalties referred to increase duties on export of fuel.

According to Deputy Prime Minister Dmitry Kozak and Minister of energy Alexander Novak, while the oil companies are fulfilling their obligations to control prices. While Novak said that from the end of may of the price have ceased to grow due to lower excise tax on gasoline and diesel fuel. However, the objective reality suggests otherwise.

This is the head of state on one of the issues associated with increasing fuel prices: "I agree with you, what is happening now is unacceptable, it is wrong. But we must admit that this is the result of imprecise regulation, which was introduced recently in the field of energy. By the autumn needs to be additional measures to stabilize the situation on the market. I will ensure that the situation is not condoned".

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