Russia boosts gasoline export duty to keep fuel at home

RIA Novosti reported that Russia will hike its gasoline export duty 44 pc from May 1 instead of an expected 34 pc to fight local fuel shortages. The government said that the tariff, tied to international prices for gasoline, will stand at USD 408.3 per tonne instead of the previously planned USD 304 per tonne. Vadim Mitroshin, an analyst at Otkritie bank, said that gasoline exports will now make sense only for companies with refineries near the border. International oil and oil product prices have been boosted by unrest in the energy rich Middle East and local companies prefer to sell gasoline on the world market after the Russian government capped retail prices. The price regulations led to a deficit of gasoline in many Siberian regions and in the north of the country. Troika Dialog investment bank said in a research note that the rather kneejerk emergency measure to raise export duties comes in response to shortages on the domestic market. The shortages in turn were provoked by the government’s insistence in February that oil companies freeze prices at the pump which incentivized them to export more of their gasoline.

Troika said that Russian companies sent just about 8 pc of total gasoline production abroad in 2010, so the direct effect will be small but higher export duties should depress domestic prices. Gasoline price rises were reported across the country at between 2 pc and 20 pc this week and Sergei Kudryashov deputy energy minister of Russia has said he expected a further 5 pc rise.

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