What Will Increase In Price Following Fuel?
- 26.07.2018, 9:04
Belarusians are being prepared for other rise in prices.
According to Deputy Prime Minister Uladzimir Semashka, in January 2018 Naftan refinery lost $25 million, and Mozyr refinery lost $12-13 million.
Pro-government "specialists" assume that "low prices for fuel" within the country is the key problem of these enterprises.
In this regard, Charter97.org decided to ask famous economist Leu Marholin for comments:
- I absolutely disagree with pro-government "experts", because petrol is an excisable product. That is, this is a high margin product which is excised.
And if the price for a raw material increases, I mean for oil, or there are some other problems; the authorities can chooseone of two ways. The first is to decrease excises for a while. It's easier to do because the oil world prices are subject to fluctuations, and, accordingly, the same is about oil products.
So it is easier to contol it. Given that our government is not accustomed to share with its income, it's easier for it to follow the second way and to increase prices for fuel for the population, explaining it with growing prices and so on. "It's not our fault, there are obstacles we cannot ignore."
In general, one should be aware that the new price growth for oil products is to happen.
- And what about the "modernization" of Naftan and Mozyr refineries, which has started in 2016?
- Unfortunately, despite of a constant modernization, our two refineries are lagging behind western enterprises. And it does not contribute to the financial standing.
And I wonder why the current power has failed to make the state-owned enterprises leading ones over 25 years. After all, it does not require any know-how. There is the equipment in the market, but, unfortunately, you just need to buy it and install.
- According to statistics, Belarus buys in 21 million tons of Russian oil. The domestic market consumes only 7 million, the rest is distilled. May exported products help to avoid the price growth?
- This is one more argument proving that the population is not capable of plugging any holes. You can imagine how significant the price increase should be - our population consumes only 30% of products produced by our enterprises - to make our exported products loss-free. It's other proof that the argument about losses of oil refineries is a good excuse for oil price increase for the population.
- It's believed that fuel prices are low in Belarus, but it's noteworthy that a German with his average salary can afford more fuel than a Belarusian with his salary...
- It's the common problem of the current power, which keeps saying that we cover reasonable expenses. And it's not about oil and oil products, but, for example, housing and communal servises. At that, it forgets that such things should take into consideration the purchasing power of people. That is, it specifies a part of a salary spent on oil products, utility bill, essentials and so on. Unfortunately, the authorities do not think about it.
- Did the authorities forget mass protests against oil price increase held throughout the country a few years ago?
- You know, they did not. And that's is the reason for a constant one-penny increase for fuel. In previous years they would just increase the price, that's all. The current price increase policy proves that the authorities still well remember the events of 2011. The topic of the fuel price growth is still acute and the authorities fear to make the cup run over.
I stress that the very statement of Semashka proves that the price growth will continue. I think the tendency we observed in the first six months of this year will continue. We can only guess how intensive the fuel price growth will be.
- If the price growth for fuel cannot save plants, who do you think can make money on it?
- You know, we have common prices for petrol and diesel fuel. The price of bread, milk, sausages and other products includes costs for their transportation. Dairy products can increase in price; after all, milk is mainly delivered from collective farms by cars.
In general, the price increase for fuel will affect all products.
The price increase for fuel plays in favor of the lobby standing behind oil refineries and those dealing with exports of oil products. The Ministry of Finance is also interested in it. It order to keep the income made on export of oil and oil products at a level, the ministry has to decrease the negotiated price, and it should be compensated. And it tries to shuffle it off on the population.