Why does gasoline in Russia constantly rise in price even with a low oil price?


Oil has fallen in price, and gasoline has risen in price again — a paradox that intrigues every Russian.

In fact, no matter how the price of oil on the world market changes,

The fact is that retail oil prices are not set according to market principles, but are manually regulated by the state using a damping mechanism.

Damper is a tax deduction that encourages oil workers to sell fuel on the domestic market. If oil on the stock exchange is expensive, then it is more profitable for businessmen to sell it abroad than in Russia.

However, there should not be a shortage of fuel in the country and

But this mechanism has a flip side of the coin. If the price of oil on the exchange falls, the difference is transferred to the budget by the oilmen. In addition to damper payments, they are also forced to transfer taxes to the budget: mineral extraction tax, profit tax, excise taxes.

Nobody likes to be poor, and therefore companies shift their losses onto the consumer. Thus,

In Western Europe and the USA there is no damping mechanism and prices are subject to market principles. At first glance, it may seem that our fuel is quite cheap: a liter of AI-95 gasoline in Russia on average

However, the average salary in Russia

This will be explained by the strength of the economy: in the States and the EU, it is more stable and powerful and relies primarily on high-tech production, and not on the sale of raw materials.

Contrary to popular belief, nothing good will come of it. Gasoline will become less affordable for the population, since if the damper is removed, oil workers will incur losses and increase the price of gasoline.

If, however, the state manually makes gasoline at the price of water, as in the Arab and Latin American countries, then it will have to directly subsidize the oil industry.

In other words, oilmen are now replenishing the budget. But with direct control of the oil industry, it will have to pour money from the budget. Already now, large sums are spent to cover losses of companies, and they will only grow in the case of direct price control.

Thus, gasoline will become cheaper, but along with it, incomes of the population will also decrease.

The only way to make gasoline available to the population is to develop the economy. We need to fight unemployment, attract large foreign companies, and increase non-resource and high-tech production.

However, in the current geopolitical situation, sanctions, a pandemic, economic crises and the reliance of the Russian economy on the sale of resources, gasoline will not be available soon.

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