The price of 95-octane gasoline could jump to 50 cents per liter

15 October 2018

The rising cost of fuel is inevitable

Alexander Sharonov, photo ntv.com.tr

last week came the news that the government formed a scheme of subsidized prices for gasoline and diesel fuel. Allegedly the so-called "damping allowance" has approved Prime Minister Dmitry Medvedev. However, experts believe that the new scheme will be ineffective, and the cost of gasoline AI-95 will increase to 50 cents per liter before its implementation.

the government's Proposal is to tax maneuver. It is planned to increase the severance tax (tax on the extraction of natural resources), and additionally the proceeds (about 600 billion rubles per year) be spent on subsidies to the oil companies to hold retail prices. It is not clear how such a transfusion from a sieve can have a positive impact on fuel prices, but when the government is all calculated, then it should work.

At the same time, the interviewed Autonews.ru experts sure that the proposed measures will not be enough for deterrence. The current situation will overlap the increase of VAT from 18% to 20% from 1 January 2019. Plus, very soon (in October) will grow "diesel fuel": company will begin to switch from summer diesel fuel in winter, which is a priori more expensive.

According to Independent fuel Union, the market crushes one feature. Today retail and wholesale prices are actually equal. This leads to the fact that the situation actually is in the cocked spring: any of a push to prices at the gas station rushed up.

Here are losses of gas stations themselves. The independent network (i.e. not owned by the oil giants) have allegedly trade at a loss. And if they leave the market, then the remaining companies will only increase the temptation to rewrite the price tags.

All of these factors indicate that by the end of 2018 fuel prices may add 2-3 rubles per liter. In the second quarter of 2019 the cost of gasoline AI-95 should reach the psychologically important level of 50 rubles per liter. And this is only a baseline scenario close to optimistic.