Fuel acceleration: why gasoline prices are rising at the beginning of the year
Retail gasoline prices in Russia resumed growth after two months of staying at a relatively stable level. According to Rosstat, from January 1 to January 9, the cost of gasoline increased by 0.3%, diesel fuel - by 0.7%. Experts note that such a dynamic was expected. The agreement concluded between the government and the oil companies allowed them to increase fuel prices by 1.7% in order to compensate for the increase in VAT from January 1, 2019. At the same time, analysts say that the rise in prices is one-time.
Retail fuel prices at Russian gas stations have resumed growth. According to Rosstat, from January 1 to January 9, the cost of gasoline rose by 0.3%, diesel fuel went up by 0.7%.
Wholesale fuel prices are also showing growth. The cost of a ton of AI-95 gasoline during trading on the St. Petersburg International Commodity and Raw Materials Exchange on January 11 increased by 3.2% to 44 thousand rubles. The price of interseasonal diesel fuel increased by 2.7%, to 47.8 thousand rubles, and for winter diesel decreased by 0.02% to 53.27 thousand rubles per ton.
Earlier, Dmitry Makhonin, Head of the FAS Fuel and Energy Complex, informed about the increase in the cost of fuel. According to him, basically the prices were raised by large oil companies, which substantiate this decision by increasing VAT. The representative of the FAS at the same time noted that the level of price increase fits into the framework of the previously concluded agreement between the government and the oil industry.
“In a number of regions, we recorded a price increase of no more than 1.7%. These are mainly regions of the European part of Russia, ”said Manokhin, quoted by TASS.
Makhonin also added that FAS did not find any increase in fuel prices in Siberia and the Far East.
Recall that in November 2018, the government and oil companies signed an agreement on measures to stabilize the situation on the fuel market. Oilmen have committed to fix wholesale prices for gasoline and diesel at the level of June, as well as to increase the supply of fuel to the domestic market. The agreement is valid until March 31, 2019.
The terms of the agreement allow oil companies to raise prices at gas stations in January to compensate for the increase in VAT from 18% to 20%, but not more than 1.7%. Since February, an increase is possible only within the average level of inflation in the country.
Alexey Kalachev, an analyst at Finam GC, in an interview with RT, stressed that the price dynamics in the fuel market is quite manageable.
“The rise in prices at petrol stations by 50-80 kopecks at the beginning of the year is just the very 1.7% that were announced due to the increase in the VAT rate. In the future, at least until the end of the first quarter, price dynamics will be kept within the framework of official inflation, ”Kalachev said.
The president of the Russian Fuel Union, Yevgeny Arkusha, in a conversation with RT, added that independent gas stations raise their price tags only with a sharp increase in the wholesale price so as not to suffer losses.
“I believe that in the coming days, the cost of fuel will increase in almost all oil companies. At independent gas stations, prices were higher, and now they are leveling up, ”says Arkusha.
According to Rosstat, the average retail price of gasoline in Russia increased by 9.4% last year, more than double the rate of inflation. However, in the past two months, the price increase has practically stopped. Against the background of the agreement reached in autumn between the government and the oil industry, in November the average price of gasoline added 0.2%, and in December it decreased by 0.1%.
Market analysts claim that price stabilization has contributed, including a change in external conditions, which has increased the attractiveness of supplies to the domestic market.
Earlier, Deputy Energy Minister Pavel Sorokin said that the decline in world oil prices at the end of 2018 formed favorable conditions for the sale of gasoline in Russia. So, in November, the cost of fuel in the domestic market was on par with foreign supplies, and in the middle of December it became more profitable to ship gasoline in the country than to export.
However, in early 2019, the situation changed somewhat. Yevgeny Arkusha explained that deliveries abroad have once again become more profitable due to the new wave of rising world oil prices and lower export duties since January 1.
“Nevertheless, there is hope that in the first months of the year the demand for fuel will traditionally be lowered, so that there will be no large volumes of export,” Arkusha did not rule out.
Anna Kokoreva, Deputy Director of the Alpari Information and Analytical Center, claims that in 2019 the Russian fuel market will avoid the threat of a sharp rise in prices.
“In the new year, the compensation mechanism for the difference between the export and domestic prices will work. Also, companies will be required to supply to the domestic market no less than a certain amount, so the reasons that previously led to an imbalance should be leveled. In general, prices are frozen until March and there should be no major changes, ”Kokoreva concluded.
From January 1, excise taxes on gasoline of the 5th class increased from 8213 rubles to 12314 rubles per ton and for diesel fuel from 5665 rubles to 8541 rubles per ton.
Experts predict that the increased fiscal burden can cause a rise in fuel prices in the wholesale market.
“The wholesale prices fixed at a sufficiently high level (with cheaper oil compared to the autumn level) create a reserve that should help manufacturers survive a sharp increase in fuel excise taxes. In the event of a resumption of growth in oil prices, the problem of the transition to floating excise taxes linked to commodity prices will become topical, ”Alexey Kalachev explained.
Earlier, the government instructed the ministries and the Federal Anti-Monopoly Service to work out the possibility of introducing flexible excise taxes on motor fuels, which will be inversely related to oil prices, by March 1, 2019. That is, in the case of a rise in price of raw materials, the size of excise taxes will decrease. Currently, it is fixed and does not depend on world oil prices.
Compensate for the increase in excise taxes should also be new mechanisms, prescribed in the package of laws on the completion of the tax maneuver, which began to operate from 1 January. This is a reverse excise tax on oil supplied to Russian refineries, as well as a damping excise tax, which will take into account the profitability of exports of petroleum products.
Alexander Vylkin, senior consultant at VYGON Consulting, believes that the damping mechanism will be able to smooth out the impact of increasing excise taxes and fluctuations in oil prices on the cost of fuel. At the same time, if last year the burden of price restraint was placed on oil companies, in 2019 the state took part of the burden.
“The prices at the gas stations are currently not determined by the market, but by agreements between oil companies and regulators, so the increase in excise taxes has a minimal effect on retail. Oilmen had the opportunity to raise prices in accordance with the VAT increase, they took advantage of this, but in general, in 2019, the increase in the cost of fuel should not exceed inflationary growth - within 5% taking into account the January indexation, ”concluded Bylkin.
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