The Ministry of Finance may offer a temporary solution to stabilize the fuel market

Sergey Kondratiev, Principal Director on Economic Studies at the Institute for Energy and Finance, commented to the TASS news agency on possible measures to stabilize the situation on the fuel market.

The Russian Ministry of Finance is unlikely to resort to radical solutions in the fuel market, such as a return to full payments under the damping mechanism. Temporary measures to stabilize the situation on the fuel market may become more likely, the expert said.

"I think that a return to full payments on the damper is theoretically possible, but still is not a basic scenario for the Ministry of Finance. In this case, it turns out that the planning horizon is measured not even in months, but in weeks, and any decision on taxes can be changed quickly," he said.

According to Kondratiev, the Ministry of Finance can offer in the current situation a mechanism of one-time extra payments, which may be the introduction of an additional coefficient or a component in the calculation of the damper, or a temporary reduction, "zeroing" of the excise tax on gasoline, diesel fuel with compensation to the regions of falling budget revenues.

"For example, some European countries that faced a sharp rise in fuel prices in 2022 resorted to reducing excise taxes. I think that the Ministry of Finance will rather try to offer a temporary solution without abandoning plans to reduce payments for the damper as a whole (approved now until the end of 2026)," the expert added.