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.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.