The Russian Government is working out the negative excise duty to avoid jumps in petrol prices

On July 12, speaking at the Oil Summit of the Republic of Tatarstan, Deputy Minister of Energy of Russia Pavel Sorokin told journalists that as part of the tax maneuver, the damping negative excise duty on motor fuel to compensate for part of the difference between the world price and the domestic market price to avoid sharp fluctuations in the fuel cost will be worked out by 2019.

The Russian Government took measures to moderate the rise in petrol prices, when a sharp jump in prices occurred between April and May. A combination of factors influenced the growth of wholesale prices on the stock exchange, Sorokin explained. A stabilization of the exchange rate of the rouble and increase in oil prices led to pressure on prices.

"The Russian Government understands the importance of this issue and has taken unprecedented measures to remove pressure on prices such as 3,000 rouble decrease in excise duties for gasoline and 2,000 roubles for diesel. Also, oil companies agreed to keep prices at about the end of May level,” he said.

"Realizing that these measures may not be enough, the Government is now actively monitoring those volumes of oil products that are supplied to the stock exchange. Since June 1, wholesale quotes for both diesel and gasoline have dropped dramatically as well. This is a very important factor that relieved pressure. Now the prices are holding at the same level that we observed at the end of May. We expect that they must remain stable in the foreseeable future,” Sorokin explained.

"Along with reduction in excise duties, the Government has got the right to impose an export duty on oil products, if the situation is complicated. However, we hope that we will never use this mechanism. It will allow us to bring down prices for oil products, but this method is severe," he added.