The State Is Cowardly and Knows It Treads on People's Corns, Economist Says
- 1.04.2019, 9:56
How long will price growth for fuel last?
Retail prices for motor fuel have increased by 1 kopeck since March 31, Zautra Tvaie Krainy informs.
The cost of 1 liter of 92 RON is 1 ruble 49 kopecks, 95 RON - 1 ruble 60 kopecks, 98 RON - 1 ruble 81 kopecks, diesel fuel - 1 ruble 60 kopecks.
This is the sixth change in fuel prices this year. The last one was a week ago: gasoline and diesel fuel rose by 1 kopeck.
According to economist Leanid Zlotnikau, one of the reasons for it is that both refineries in Mozyr and Navapolatsk are not profitable. They owe much money for the equipment that was purchased and installed during the reconstruction of these enterprises in recent years.
- On the other hand, revenues of refineries and the state have decreased due to the Russian tax maneuver, which also affected the income of Belarusian refineries," the expert says.
At the end of last year, fuel price growth was temporarily suspended due to the fall in oil prices, but then it began again.
- Since the beginning of 2019, the price of Russian oil supplied to Belarusian refineries has increased by 14.3%, while retail prices of motor fuel have increased by an average of 3.25% over this period, which has not compensated for the growth in the refinery's costs of raw materials," the press service of Belneftekhim says.
But the main problem is different, Leanid Zlotnikau believes.
- The refinery yield of domestic refineries is somewhat lower than that of the Western countries, where Belarusian oil products are supplied. They can get profit at such prices for raw materials, our refineries cannot," the economist says.
Belarusian refineries have smaller yield of light oil products, which leaves the largest margin. Furnace oil does not bring high profit. And the current economic situation does not allow the authorities to provide substantial assistance to the refineries. The economist ties this to accumulated foreign debts of the state.
- The state can't support enterprises with foreign currency, as it has to pay off its foreign debts," Leanid Zlotnikau says.
The Minister of Finance told us where to seek money to compensate for the oil revenue shortfall.
Why can't fuel prices grow drastically at once, instead of constant penny growth?
- The state is cowardly, it knows it treads on people's corns. People will tolerate a penny growth," the expert says.
In previous years, when fuel prices were rising more significantly, it caused protests, when motorists turned on horns blocking roads.
- And the authorities couldn't do anything to them. It's not like dispersing a column of demonstrators with flags. Motorists are other strata, more powerful, so the authorities are afraid," the analyst says.
As for further growth of prices, according to the expert, they are unlikely to rise up to $2 per liter, but some price growth will occur.
- However, oil prices are expected to decline on the world market. If they fall by 15-20%, the increase in fuel prices may end," Leanid Zlotnikau sums up.
In 2018, fuel prices changed 27 times (mainly by a penny) in Belarus.