Tuesday, September 19, 2000

Soaring Fuel Prices Blamed on Government

THE MOSCOW TIMES

A fuel industry official is blaming surging gasoline prices on the absence of a state strategy on the fuel market, and an analyst said Monday that prices will stabilize only next spring.

"We have been ringing all the bells about the problems on the fuel market ~ but the authorities refuse to take the need for seasonal adjustment into consideration when they issue exports quotas," Sergei Borisov, president of the Russian Fuel Association, said Monday in a telephone interview.

In the last three months, gasoline prices have skyrocketed by 25 percent from about 6 rubles per liter of 92-octane, the most popular brand, to about 8 rubles (29 cents) per liter, he said.

Vladimir Nosov, oil analyst with Chase Flemings UCB, said fuel prices are likely to reach about 10 rubles at the beginning of next year, after the introduction of a new tax on fuel, and may finally level at about 9.5 rubles per liter only next spring.

Both experts said the world oil crisis and fuel shortages had little influence on the domestic market.

Borisov said only four out of 21 regions that on Monday reported to the association had no fuel shortages, while most regions had part of their gasoline stations closed or cars waiting long hours in lines for fuel.

"What we have now is called 'a shoemaker left without shoes' f look, [Western Siberian oil cities] Surgut and Tyumen are short of fuel," he said.

He said more oil needs to be kept in the country for the April sowing season, the August harvest and in September, when people returning from vacations use their vehicles more.

Borisov called for a state strategy on the distribution of oil and petroleum products to be created with the participation of all market players.

http://www.moscowtimes.ru/19-Sep-2000/stories/story30.html

-- Carl Jenkins (Somewherepress@aol.com), September 19, 2000