Support The Moscow Times!

Gasoline Prices Could Jump 18%

The price for gasoline could jump seven to 18 percent in the near future or fuel shortages could arise, Gazprom Neft CEO Alexander Dyukov warned, Vedomosti reported Thursday.

Russia needs "unambiguous price adjustments" on oil products that he said are far below international market prices. If prices remain unchanged, it will flush the domestic market, and increased seasonal demand in April and May could leave Russia facing a shortage.

In 2011 oil companies resisted pressure by officials to suppress prices during election season, but now companies are beginning to raise prices and are waiting for the reaction by authorities, Russian Fuel Union president Yevgeny Arkusha told Vedomosti.

Last year Prime Minister Vladimir Putin spoke about the need for low prices, and in late January Energy Minister Sergei Shmatko said gas prices would be frozen until March in accordance with an agreement made with oil producers.

"The consumer has to feel reduction in fuel prices in their pockets, and it should be visible at the pump," Putin said.

Prices experienced a net decrease in December and in the first two months of 2012, dropping 0.3 percent, compared to a 0.6 percent rise in November, Rosstat data showed.

Wholesale prices underwent record growth in the first week of March as the election season was winding up, rising by up to 4.9 percent, oil market analysis company Kortes said.

The rise in wholesale prices has just begun to be felt at the pump. Lukoil spokesman Dmitry Dolgov said that last week on average the price of gasoline at their gas stations was up by 25 kopecks per liter.

Read more