The expert assessed the possibility of a gasoline shortage in Russia

The government keeps the “oil sledgehammer” at the ready

Vladimir Putin instructed the government, together with oil companies, to develop a plan to stabilize prices for gasoline and diesel fuel, in addition, to provide domestic agricultural producers with sufficient fuel.

What kind of measures these might be, and whether the oil industry will agree to pump gasoline and diesel fuel into the domestic market instead of exporting, MK asked the director of the Energy Development Fund, Sergei PIKIN, to tell us.

“This is not the first time the President has used exactly the same rhetoric to address the government with a demand to stabilize gasoline and diesel prices on the domestic market. And also to ensure the necessary volume of fuel for domestic consumers, primarily farmers. So this statement by Putin is consistent with the policy that the government has been pursuing over the past two months in the oil market.

– And yet, what kind of measures could these be by which the government plans to control retail prices for gasoline and diesel?

“I think the government’s greatest concern now is the possibility of a shortage of winter fuel for consumers on the domestic market. Providing Russian producers and farmers with winter diesel is the number one task for the Ministry of Energy and the relevant prime minister.

And task number two is to contain the onslaught of speculators. For this purpose, on October 1, the government introduced a protective duty on the resale of fuel; in addition, on September 21, the Cabinet of Ministers temporarily restricted the export of gasoline and diesel from the Russian Federation, and this ban is still partially in effect.

– So the government wants the retail market to live in unison with the wholesale market?

– This has never happened and is unlikely to happen. And, by the way, it’s very good that this is not the case. Otherwise, we would see such price jumps at gas stations that no one would think it was enough. After all, over the past two years, wholesale prices have fallen rapidly several times and risen again just as often, imagine if the same swings would arise in retail?

– Yes, at the beginning of the year, wholesale prices for diesel were almost 2 times lower than now.

— That’s right, although retail prices have risen, but within 10 percent. Wholesale lives its own life, and retail lives its own.

– But if retail prices are not directly dependent on wholesale prices, then how are they regulated?

– In our country, regulatory mechanisms can only be partially considered market-based; in fact, they are directive-market-based. Now the main directive of the president and, accordingly, the government is to ensure that the growth rate of retail prices for gasoline and diesel does not outpace the inflation rate in the country.

– What if someone disobeys this directive sent down from above?

– He’ll get it in the head.

– World oil prices are constantly growing since the beginning of the conflict in the Middle East, and what if our oil workers decide to export all their fuel, since they are not allowed to earn money within the country. Is it possible that, in trying to stabilize retail prices, the government itself will create a fuel shortage on the domestic market?

“I don’t think it will come to that.” Oil companies have already concluded that there is no point in trying the government’s patience. If something happens, the government can always impose a ban on fuel exports. Of course, such extraordinary measures have not existed in our country for a very long time, but having applied them in the fall, officials realized that they could wield this sledgehammer very successfully. And business also realized that there was force against them. So, I don’t think it will ever come to a new fuel shortage on the domestic market. And the prices will be fine too. They will grow, but within the limits of inflation.