A bill on long-term restrictions on gasoline prices has been introduced to the State Duma

Experts believe that this will lead to the emergence of a “black market”

A bill to limit retail prices for gasoline and diesel fuel has been submitted to the State Duma and is scheduled for consideration in the autumn session. It proposes to set the maximum possible retail prices for gasoline and diesel fuel for trading at gas stations. The validity period is also specified: for no less than three years and no more than five years. According to the authors of the document, maximum permissible retail prices will be set by the government.

If the bill is adopted, this measure could come into effect as early as the beginning of 2024. The explanatory note states that previously taken measures (the introduction of a damping mechanism in 2019) “do not provide visible results for the end user.” Therefore, the introduction of a mechanism for maximum permissible retail prices for gasoline and diesel fuel seems reasonable and justified – in order to protect the economic interests of citizens and society as a whole.

Behind the language flashing in the explanatory note about “protecting the interests of citizens and society as a whole,” the very meaning of the document is visible: state regulation of retail fuel prices. If now the Federal Antimonopoly Service ensures that prices at gas stations do not rise above average inflation (which is more or less successfully observed), then now exceeding the maximum fuel price at gas stations will be a violation of the law.

“We wouldn’t want our state to take this path—establishing maximum retail prices,” says Pyotr Shelishch, Chairman of the Russian Consumer Union. – Yes, and for years to come, designate maximum prices within 3-5 years. Our federal budget is adopted for a three-year period. And deputies want to set a “maximum speed” for each gas station for 5 years. But by and large we don’t know what exactly will happen in a month.

In fact, prices set by the state work in one direction – to the emergence of a “black market”. First, there will be a shortage of gasoline and diesel fuel at gas stations. And then we will start extracting fuel through some other channels, through relatives and friends.

“No, though,” he continues. – First of all, prices at gas stations will immediately rise to the maximum level established by the government. What’s the point of selling fuel cheaply if, by law, it can be sold at higher prices? And then the shortage and everything else will begin.

– Well, why is there necessarily a shortage?

– When, due to high costs, it is unprofitable to trade something, then trade stops. We know that wholesale prices rise very sharply at times. This means that maximum prices will also have to be introduced for them. And the wholesale link depends specifically on oil producers, and they will have to be limited.

Everything will end with the fact that we will have the maximum permitted prices, but there will be no gasoline and diesel fuel..