Government action after the meeting March 26th under the presidency of Deputy Prime Minister Dmitry Kozak, they were announced without discussion with oil companies, according to a letter from Rosneft's executive director, Igor Sechin, to Prime Minister Dmitry Medvedev, reports Interfax. At the same time, it is the oil companies that transport Losses from fuel price containment and non-market regulation of the domestic market, Sechin said in a letter. Since May last year, manual regulation of non-market prices has actually been conducted, the government is being offered all the new mechanisms for manually regulating commercial activities, the letter said. These proposals create systemic risks for the functioning of the oil industry, which "according to the absolute majority of market participants, becomes a duplication of existing regulatory instruments," Sechin said in a letter.
At the end of March, the government decided to extend the validity of agreements with oil companies to contain fuel prices until July. Retail fuel prices have been frozen and adjusted only to the growth of VAT, while small wholesale prices have fallen by 5-16%. At the same time, the associated production costs have increased significantly and the excise duties on fuel have increased by 50%. As a result of these measures, the oil industry actually subsidizes related economic sectors, the letter states.
Rosneft estimates losses from a price freeze, an increase in excise duties, the effect of completing a major fiscal maneuver and an incorrect adjustment of the damping mechanism from May 2018 to over 75 billion rubles. In the case of extension of the agreement, the loss of the company will be 30 billion rubles. by quarter, writes Sechin. At the same time, he said, the compensation mechanisms did not work.
Now the domestic fuel market is balanced and allows the transition to market-based regulatory mechanisms, says Sechin. Since May, it suggests that subsoil users are obliged to treat oil in Russian refineries and to supply oil products on the domestic market for an amount not less than 17.5% of the oil produced in Russia. The government approved this measure in September, but the relevant services announced the complexity of its administration.
The Kozak representative did not comment on the letter to Sechin. The press service of the agency "Rosneft" stated that the company does not comment on the work correspondence. Last week, Kozak announced the extension of the agreement to stabilize the fuel market until July. "In this year we must move away from manual control. We need to do a self-regulation mechanism in the near future, taking into account the damper, "Kozak said. Separate additional agreements with the companies were not signed, two interlocutors, close to two oil refineries, told Vedomosti. According to their information, the minutes of the meeting were signed in Kozak last Tuesday 26 March.