Even a reduction in the excise tax on gasoline is unlikely to lead to lower fuel prices. Such a disappointing statement was made by the Chairman of the Central Bank Elvira Nabiullina in an interview with Reuters.
“In our view, the best scenario in this situation may be something that will stop the growth of prices. But in any case, we believe that gasoline prices will not grow as rapidly as in previous months”, — quotes Agency the head of the Central Bank.
As explained on Friday, it was initially planned that the reduction in the excise tax on gasoline and diesel fuel should lead to lower prices for these commodities by about 4-5%. However, most likely that won’t happen, because “in the retail trade with oil products is now fairly low margin, and probably a reduction in excise duties will lead to the restoration of margins in the retail sellers of petroleum products”.
The rise in gasoline prices, which began in the spring, in may reached record levels and ahead of annual inflation in five times. Compared with the April value increased by 5.6% since the beginning of year fuel has risen in price already 7.3%.
In late may, Deputy Prime Minister Dmitry Kozak has agreed with the oil companies that they will fix the fuel cost at 30 may, and for this government since June 1, will reduce the excise tax on 3 thousand roubles for ton of gasoline, and 2 thousand rubles per ton of diesel fuel, which has long sought oil. Experts, however, say that these measures will pay off not earlier than through two-three months.
Don’t believe the decline in prices and Russians. According to a survey conducted by VCIOM on may 27-28, that the growth will continue, sure 80% of the population. About 83% of respondents believe that rising fuel prices worsen their financial situation, while more than half believe that because of this they can cause serious financial difficulties.
Among the reasons for the increase in fuel prices, citizens are often called economic policy of the Russian authorities (66%), 21% blamed it on external factors. Also the Russians called to blame: 46% of respondents believe that it is the oil companies, 40% blame the government, 19% – the owners of gas stations. In fourth place was personally President Vladimir Putin (12%), and only the fifth Western countries with sanctions (10%).
“The rise in prices is one of the most resonant for the population economic problems. The reason is the comprehensive nature of the effects. The acuteness of the problem gives the eternal question of Russians: why gasoline prices are growing in Russia when the oil price falls, and when it is growing,” — said the head of the practice of political analysis and consulting VTSIOM Mikhail Mamonov.
The government is the rising price of gasoline and diesel fuel to explain the growth of world oil prices. As explained by Dmitry Kozak in the beginning of June, if oil prices in foreign markets above, this “can do its production in Russia is relatively unprofitable”.
State Duma Deputy Igor Ananskikh said that the sharp rise in fuel prices can be related to the fact that the price of oil on the exchange has grown, what are its miners, importing “black gold”, and “align” profit, raising the price of petrol and diesel in Russia. This opinion is shared by many experts.
On 4 June during a meeting with Deputy Prime Ministers Dmitry Medevedev stated that the manifestation of selfishness on the part of companies involved in the production, supply and sale of gasoline, is unacceptable. According to him, first of all it is necessary to monitor compliance with existing agreements, however, if that is not enough, the government should develop a set of operational measures.
Dmitry Kozak, in turn, noted that a further increase in petrol prices will lead to additional costs in such sectors as agriculture, industry, transport and construction, in the amount of 220 billion rubles a year. Now in these areas of the economy involved 35.6 million people, while in the oil industry employs 1.6 million
However, the same evening, one of the largest companies in the industry Rosneft released a statement saying that a temporary reduction in the excise tax rates will not solve the problems in processing and in the oil market. But zero by 2024 the export duties on crude oil under the tax maneuver, could raise prices for fuel in Russia at least half.
The next day the first Deputy Minister of energy Alexey Teksler said that the government’s measures to change the taxation scheme in the petroleum sector (tax reform) and a decrease in the rate of excise will allow to avoid a sharp rise in gasoline prices. A number of experts also stated that prices have stabilized.
However, other analysts agree with Elvira Nabiullina that the rise in prices, at best, managed to slow down. Economist, Professor of financial markets and financial engineering of Ranepa under the President of Russia Sergey hestanov considers that in the future the Russians need to prepare for the rising cost of fuel. The problem is that incomes do not grow up the same pace.
— Most likely, Elvira Nabiullina of the right. The reasons for the increase in gasoline prices a lot, but the most relevant is that oil has risen, and with it gasoline in foreign markets, but the ruble strengthened is not enough. As a result, the price of gasoline for oil companies in foreign currency in the domestic market was too low. So they began to sell not only oil but also oil products, including gasoline, in foreign markets.
Reduction in excise duties this process will slow down, but the problem will not solve. Because when there is a possibility of exports, the company always choose where is more profitable to sell the product. And now there is such situation, what to sell on foreign markets are always profitable.
“SP”: — Dmitry Medvedev recently urged oil companies not to be selfish, Rosneft, by contrast, issued a statement in which they complained that they are too hard to tax. Who is right?
— You can’t call someone who is clearly right or wrong in this situation. On the one hand, the truth is that we have radically cheaper than petrol in the countries that are our economic partners. From this point of view, put too much pressure on the oil companies is hardly correct. On the other hand, the income level of the majority of Russians that pay for gasoline in foreign prices for them, to put it mildly, expensive.
The government is caught in the middle. On the one hand, it is necessary to take care of the domestic consumer, on the other, it is clear that greatly injure the interests of oil companies is not desirable.
“SP”: — What will make power?
— Most likely to be found a compromise. The government will reduce the excise tax that will slow down the growth of prices. But to completely stop it will not. And slowly and gradually for the majority of positions we will reach European prices, but this process will take 5-10 years. By the way, most of the commodity groups we have quite European prices. This applies to clothing, electronics, food. Over time, this will probably be the gasoline.
“SP”: — That is to rely on lower prices is not worth it?
— For a short time it could be. Arbitrary decision using the same FAS can achieve some effect. But for a long time, the market will take, whether we like it or not.
Analyst at JSC “Finam” Alexey Kalachev also believes the decline in fuel prices, but it is reassuring that from July they can stabilize.
— There are three main factors affecting fuel market in the country. The first is the excise tax. The second is the ratio of the exchange rate and world oil prices. In fact, this factor now came in first place. And the third is export duties. This factor specifies the difference between export and domestic prices. If you remove the export tax, the domestic price immediately start to rise to catch up with the export. Or oil from the domestic market just going to leave and there will be a deficit, which is not. If to raise tariffs, the domestic price will decrease.
But, apparently, fees are not planning to increase, by contrast, is going to reduce. As the exchange rate, everything is in the hands of Elvira Nabiullina. But, it seems that the Bank is not going to take measures to strengthen the ruble and would support him in a weakened state. So this factor is not going to work on reducing the cost of gasoline. But since the ruble has ceased to fall, and the price of oil to rise in the near future is likely to stabilize in the market.
“SP”: — A reduction in excise duties?
— The excise duty should be reduced by almost a third. This decrease gives approximately 2.20 rubles per liter of petrol and 1.70 rubles per liter of diesel fuel. It’s not much when you consider that wholesale prices are not much different from retail. But the reduction in excise duties will create between them a small gap to stop the rise in prices. The rest will depend on the ruble exchange rate and oil prices.
“SP”: — Judging by the news, the government is discussing the option of increasing the export duties, although according to the original plan they should be abolished. What may eventually lean the Cabinet?
— While the government plans to zero export duty, but to introduce a so-called reverse excise, when manufacturers of high-quality fuel will be compensated from the budget of the funds, which will provide economic viability for the production of gasoline and domestic sales.
Today, domestic oil prices differ from the approximately one-third thanks to export duties. If you cancel, the price almost equal, this is what he said “Rosneft”. If we want to keep our price increases, we have this difference in price increase. If you want to fully tie prices to the foreign market, the export duty is necessary to reset.
As I understand it, now these issues will be discussed. We have already calculated how much the budget will benefit from zero tariffs and growth rates of tax on extraction of natural resources. But no one has yet calculated what the cost will be according to reverse excise duty, because this mechanism has not yet been developed.
“SP”: — While there is a discussion of what to expect from gasoline prices in the coming months?
— I think stabilization. Prices are unlikely to significantly go down, is that oil will decline, and the ruble strengthened. But experience says that fuel prices almost never drop. Therefore, in the best case we can expect that they will stall at current levels. All preconditions for this are, and since July can be quiet in terms of price growth, at least for some time.
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