The export ban did not help: the government cannot stop the rise in gasoline prices

Alexey Gromov, Principal Director on Energy studies at the Institute for Energy and Finance, commented to Novye Izvestia about the current situation with rising gasoline prices in the Russian domestic market.

The situation in the fuel market is clearly getting out of control, as the Ministry of Energy has moved from soothing mantras to acknowledging the obvious facts. Experts say that action is now required from the authorities.

— The trend is very bad. Rising gasoline prices may be an additional factor driving up inflation. Rising motor fuel prices are a pro—inflationary factor if growth outstrips inflation, which is quite possible if such trends persist. The government will need to step in, otherwise the fight against inflation will turn into a fight against windmills," Alexey Gromov says.

The export ban did not work, Alexey Gromov believes, and there are several factors for this:

— I understand that the government was trying to stabilize or stop the price increase in this way. We see that this is not happening. I have some guesses related to the ongoing scheduled repairs of the refinery, there is a season of high demand for petroleum products, and there is another issue related to the transfer of stock prices to retail.

Another way is to buy gasoline and diesel not on the stock exchange, but at small refineries. Then there is a quality problem, because gasoline may be of poor quality.

An additional way to bring order to the wholesale segment is prohibitive. If bidders continue to accelerate prices, the authorities may impose penalties on them.

Alexey Gromov says:

— I don't know how it will end yet. If the price increase does not stop, it will affect the economy. We will have an active harvesting campaign there. The increase in gasoline prices is accompanied by an increase in diesel prices further along the chain. I think that at the end of August, if the price increase does not slow down, the government will introduce new deterrence tools. I don't have an answer to the question of what it will be.