Yabloko’s Bureau Decision No 2083,  25.06.2018

The rise in fuel prices after the end of Vladimir Putin’s presidential campaign is a natural result of his governing.  In most regions of the Russian Federation, prices for various types of fuel rose by 10 – 15 per cent, and in some regions by 20 per cent or more.

Such a rise in fuel prices will hit not only drivers, but also all consumers, since most goods are transported by trucks and cars. Expenses for transportation will grow, so prices will also rise.

The growth of costs in the agro-industrial complex will be especially large, as price of fuel is a significant part of the cost of production there.

The growth of fuel prices hurts both owners of summer houses and gardeners.

The rise in fuel prices will spur inflation, which, as is well-known, affects poorer segments of the population.

According to experts, the cost of oil accounts for only about 6 per cent of the fuel cost, and excises and taxes consistute over 60 per cent [of the fuel cost]. Therefore, the tiny decline in excise taxes proposed by the Government may reduce the growth rates of fuel prices, but will not lead to a drop of these  prices.

And the cartel collusion of the Government with large vertically integrated oil companies on limiting growth of prices will lead to even worse results. They can even reduce the price of fuel at their gasoline stations, trading at a loss at prices below the cost. They will compensate for these losses by their super-profits at the stages of oil production and refining. However, such a situation will lead to a mass-scale bankruptcy of independent gasoline stations. And further this will lead to monopolisation of the fuel market and an even greater price growth.

Instead of creating a balanced market mechanism for the functioning of the fuel market, in particular, the exchange trade in fuel and adequate customs duties on petroleum products, the Government is acting convulsively, reacting only to crisis situations.

The Yabloko party has been repeatedly drawing public attention to the actions of the President and the Government who shift the burden of the negative consequences of their economic policies onto the population. “The population is the second oil!” has become their unofficial slogan.

The Bureau of the Russian United Democratic Party Yabloko considers it necessary to implement serious system solutions aimed at increasing the supply of motor fuel in the domestic market and restraining the growth of prices, including:

antimonopoly measures: strict legislative regulation of the functioning of the vertically integrated oil companies, which would not allow them to abuse their dominant position or even ban of the vertically integrated oil companies. The duty of fuel producers to sell at least 70 per cent of fuel through the exchange; as well as tightening control on local wholesale and retail fuel markets;

considerable (at least 30 – 50 per cent) reduction in excise duties on fuel;

restoration of the customs regulation of the fuel market;

encouragement of new oil companies that are not vertically integrated to come to the oil refining sector;

stimulation be means of fiscal and budgetary (granting state guarantees on loans) policies of construction of new oil refineries;

reduction of economic and administrative barriers of entry into the fuel market.

Emilia Slabunova,

Chair, Yabloko