As you know, in Russia gasoline becomes more expensive only in two cases: when oil prices rise and when they fall. When asked why in a country that has the sixth largest oil reserves in the world, fuel is constantly increasing in price, people respond differently. Some blame the greed of oil tycoons who profit from the needs of the population in transport. Others are confident that the government is not in a position to regulate the pricing policy in the fuel market, therefore, in the event of sharp jumps in the cost of gasoline, the head of state must intervene in the situation personally. Experts believe that officials should look at the experience of the United States, where gasoline tariffs are determined mainly by economic factors: if oil falls in price, then fuel at gas stations becomes cheaper.
Last year, the Russians twice faced a spasmodic rise in prices at gas stations. As a result, from March to December, the AI-95, for example, went up from 41 to 46 rubles per liter. The stabilization of the situation allowed only the government agreement with the oil industry, which was reached after long negotiations and concluded only for a short period. Officials recognize that the potential for fuel cost reduction exists. However, they are not yet in a position to agree on methods for achieving this result.
In Texas for fuel
The presence in the United States of a huge number of independent mining and processing industries, as well as private retail chains of gas stations allows Americans to vary the price of fuel, taking into account the specifics of each region. The cost of gasoline can be significantly different not only in different states – even in one city, the needs of which are provided by several suppliers, it is possible to find cheaper or more expensive fuel.
The most expensive gasoline is traditionally purchased by California motorists: in Los Angeles and San Francisco, for one gallon of fuel (about 3.8 liters) they require up to $ 4. In terms of our usual volumes, it turns out that a liter of gas costs the residents of the state $ 1.05 (about 70 rubles). In Texas, a gallon of gas costs less than $ 2. That is, a liter of fuel there is twice cheaper – only $ 0.5, or about 35 rubles.
It is possible to answer why Americans are able to reduce fuel prices, when world quotes of “black gold” are falling, by looking at the structure that makes up the cost of fuel in the US market. The fact is that almost two-thirds of the cost of American gasoline (58%) is determined just by the quotations for crude oil. Another 15% is accounted for by taxes and excise taxes, about 17% are processing costs, and the cost of organizing retail fuel sales, as well as the margin does not exceed 10%.
In the US, sometimes there are scandals about gasoline that is too cheap. In the fall of 2018, representatives of the Democratic Party accused Donald Trump of artificially creating a transport collapse on highways. Shortly before Thanksgiving, which Americans celebrated on November 22, world oil prices fell sharply from $ 85 to $ 60 per barrel. As a result, gasoline in the US fell by 15%. Residents of the country refused to travel to relatives for a holiday on public transport in favor of private cars. Trump even had to apologize on his Twitter page. “Under my pressure, gasoline prices have dropped so low that more and more people are driving cars. I caused traffic congestion throughout our great country. I apologize to everyone, ”the American president noted sarcastically.
Trump, of course, was ironic. But seriously, the design of the American fuel market is capable of causing a real envy among Russian motorists. At the beginning of 2016, when oil fell below $ 30 per barrel, retail prices for fuel in the United States decreased to 26 rubles per liter in terms of Russian money. A number of gas stations in the heat of competition were selling fuel at a loss, just to keep regular (especially corporate) customers. The record was set by one of the networks of gas stations in Michigan, which sold fuel at 50 cents per gallon – 8.5 rubles per liter. In Russia, fuel cost about 35–36 rubles at that time.
At the same time, we must not forget that the average wage in the United States reaches $ 3.5 thousand per month. It is about 235 thousand rubles. In Russia, such salaries do not even dream of many of the leading specialists in their industry – according to official statistics, less than 5% of citizens in our country receive salaries of 100 thousand rubles and more. The bulk of the population, according to Rosstat, is content with salaries in the region of 40 thousand rubles. Moreover, according to independent estimates, this amount is overestimated by 10-15 thousand rubles. Therefore, the “gasoline burden” is a very tangible expenditure item of most Russian families.
How to bite taxes
Russian gasoline is never cheaper, because the pricing on the domestic market of petroleum products is very different from American standards. According to the executive director of the Russian Fuel Union, Grigory Sergienko, the fiscal part “eats up” at least 60% of the gasoline tariffs. “Quotes of crude oil put about 10% of the price of fuel. Refining, logistics and retail costs account for about 20% of the cost of fuel. And only 10% is accounted for by the margin that fuel sellers earn, – notes Anna Kokoreva, deputy head of the Alpari IAC. “The cost of fuel in Russia is influenced to a much greater degree not by the price of oil, but by taxes, therefore, when the quotes of“ black gold ”decrease, the consumer does not see any changes in retail.”
The fiscal theme is the object of fierce disputes between mining companies and officials. The state is trying to maneuver: from time to time it makes concessions to producers – for example, it makes it possible to compensate for the losses from the increase in the value added tax (VAT) from 2019, and since February it reduces export duties on oil products. And sometimes he tightens the screws and raises the excise tax on gasoline (this rate has increased 1.5 times since this year), increases the mineral extraction tax, and also threatens to use temporary protective duties on the export of “black gold”.
True, in order to stabilize fuel prices, it is often necessary to include manual control of the industry and resort to direct agreements with oil companies to contain fuel tariffs. The last of these transactions was agreed in October 2018. Oilmen agreed to freeze the cost of gasoline at the June level (45–46 rubles per liter AI-95).
True, experts believe that another sharp increase in fuel prices is not far off. Immediately after the New Year holidays at the St. Petersburg International Commodity and Raw Materials Exchange, which serves as the main domestic and foreign market for Russian fuel, the wholesale cost of gasoline jumped by an average of 5%. This was a gift to the oil industry, which eliminated the additional costs of the VAT increase. In turn, the margin of independent gas station chains, which occupy more than half of Russia’s retail fuel market, has been reduced to a minimum.
A new wave of rising gasoline prices promises to occur in April-May this year. The latest agreement between the oil industry and the government is valid until the end of March. After this period, wholesalers – processing plants owned by mining holdings, will be entitled to raise selling prices, which, of course, will cause growth in retail tariffs. The growing demand for raw materials, which is supposed to be on the world market by this time, will again lead to an increase in the supply of hydrocarbons for export, while a deficit may again appear on the domestic market, which will lead to an increase in the cost of fuel. Prices for gas stations are already growing, but so far this is happening in some regions and in Russia as a whole this process is almost imperceptible.
Catch up or overtake America?
As the deputy head of the Federal Antimonopoly Service (FAS), Anatoly Golomolzin, acknowledges, the potential for reducing the cost of fuel exists. He explains that prices can be effectively controlled not through administrative resources, but through the principles of a market economy. To do this, you need to re-engage tax regulation and tightly tie the level of export fiscal charges to the global cost of raw materials. However, so far this idea does not find a positive response in the Ministry of Finance – the agency responsible for the revenues of the federal budget.
But if a consensus between the departments is found, then theoretically it should be based on the American scheme: world oil prices are falling, Russian exporters, taking advantage of the domestic reduction of the tax burden, reduce supplies abroad – and the cost of fuel at domestic gas stations is reduced. “Additional volumes of supplies to the domestic market could stabilize and even improve the price situation in the domestic retail fuel market,” Golomolzin is sure. His service promises to warn oilmen from unreasonable increase in fuel prices by monitoring the cost of fuel daily.
True, to assert that such a price management system can be adjusted in Russia is still premature. First, a sharp collapse in oil prices is not expected in the foreseeable future – political turmoil in Venezuela and the tightening of sanctions against Iran could disrupt the long-established mechanism of supplying raw materials to the world market. The result may be a price increase of up to $ 80 per barrel. “In addition to excise and other growing taxes, oil companies put a general insecurity about the stability of the global economy in the cost of gasoline,” said Igor Yushkov, senior analyst at the National Energy Security Foundation.
Secondly, the fixing of fuel prices, agreed upon last year by officials and vertically integrated oil companies, occurred at the peak of the rising cost of fuel. Having reached a certain level, the sellers of gasoline are unlikely to move in the direction of lower price tags at gas stations.
The question of a possible rise in price of gasoline continues to be actively debated in government circles. The other day, Dmitry Kozak, Deputy Prime Minister for the Fuel and Energy Complex, spoke at the Federation Council at the government hour and promised that the Cabinet would control the “motor fuel market by all available methods to meet the targets for which an agreement was reached.” However, rather, it is again not a question of market-based methods to contain prices, but rather a connection of the administrative resource and the conclusion of a new agreement with the oil companies.
“The result is a paradox. On the one hand, the government claims that there are all prerequisites for reducing fuel prices by regulating taxation. In the case of creating such a truly efficient mechanism, over time, the pricing in the fuel market of Russia would repeat the American, flexible option, – said the senior analyst at BCS Capital, Sergei Suverov. – On the other hand, officials are not in a position to overly actively tax juggling, since financial revenues from the raw materials sector form more than half of the federal budget and serve as a guarantee of the timely increase of pensions and salaries of civil servants. This proves that low prices are not in the interests of the government. Therefore, to say that Russia will soon be able to create a tool for managing fuel tariffs, which, like in the USA,
Meanwhile, oil and gas experts are already discussing the idea of selling gasoline for half a liter. “The cost of fuel will not irritate the consumer at least on steles with prices. However, this is a masking of the symptoms, and not a cure for the disease, warns Kokoreva. – Motorists are now trying to refuel for a small amount – 500-1000 rubles. The rising cost of gasoline will not add more liters in such a check, and gas stations will have to be visited much more often. ”