ANNUAL EXPRESSION SUMMER DIESEL FUEL Rises in price by 7%
The Russian government has agreed with oil companies to reduce the price of diesel fuel to the level of October 2018. This was announced by Deputy Prime Minister Dmitry Kozak on Thursday at a meeting of President Vladimir Putin with members of the government. “Literally on Monday, we met with the oilmen again and agreed on the following: that summer diesel is being used now, they will return the price of summer diesel to the prices of October last year. This is a different product, with a different prime cost (summer diesel), and it is even lower, ”Kozak said (quoted from the transcript on kremlin.ru).
This decision, according to him, will reduce the price by 1,3-1,7 rubles. per liter of diesel fuel, primarily for agricultural producers. As Kozak's representative Ilya Dzhus explained to TASS, the essence of the agreements with the oil companies is that they will not leave the price at the current level, but will reduce it to the level of 2018, but adjusted for the increase in VAT and inflation. According to Kozak, the decisions reached with oil companies can be legislatively enshrined in the fall, which will allow maintaining a stable situation "for all future periods, regardless of fluctuations in the price of oil and oil products on world markets."
Ministry of Agriculture estimates the need of farmers for fuel for spring field work at 1,9 million tons of diesel and 300 thousand tons of gasoline. The actual stock of fuel and lubricants is 568 thousand tons of diesel fuel and 77 thousand tons of gasoline, the head of the agricultural department Dmitry Patrushev reported at the meeting. According to Kozak, now the small wholesale price for winter diesel is about 52 thousand rubles / ton, which is 2,4% lower than in December 2018. At the same time, Putin noted that in comparison with the spring of 2018, the price of winter diesel rose by 8,5%, and summer diesel by 7%. “The rise in prices that was observed in April-May last year was not compensated for either taking into account the macroeconomics or the world price,” Kozak admitted.
At the end of March, the government agreed with oil companies to freeze fuel prices for another three months, until July 1, in exchange for easing a number of obligations. At the same time, the government announced that the extension of the agreement on stabilizing the situation in the domestic market will be the last.
Growth of prices for fuels and lubricants by farmers is called one of the main reasons for the rise in price of crops. According to the director of the Samara agricultural holding "Grain of Life" (part of the group "SON») Andrey Zorin, fuel and lubricants have risen in price by 25% compared to last year. Minimum and zero technologies used by the company allow significant savings on fuel. According to the estimates of the general director of the agricultural holding "Elan" (Orenburg region) Alexei Orlov, fuel and lubricants were 12% more expensive by mid-February. The company is trying to optimize costs by purchasing diesel fuel through the railway, bypassing the oil depots.
Source: https://www.agroinvestor.ru