Posted on 09/20/2005 3:52:14 AM PDT by .cnI redruM
Russia's major oil producers agreed Monday to freeze their gasoline prices in the country until the end of the year, the Interfax news agency said, citing the Industry and Energy Ministry.
The oil companies made the decision at a meeting with Industry and Energy Minister Viktor Khristenko, Interfax quoted ministry spokesman Stas Naumov as saying. The ministry could not immediately be contacted Monday.
"The result of the meeting was a voluntary decision by the management of Russia's largest companies; prices won't rise any further on the domestic market until the end of the year," the official said, according to Interfax.
Surging oil prices worldwide have boosted the cost of gasoline in Russia, the world's second-largest oil exporter after Saudi Arabia, provoking criticism from Kremlin-loyal politicians. Gas prices rose by a ruble in the space of a week as of Tuesday, to 18 rubles ($0.63) per liter (0.26 gallon).
The biggest Russian crude oil producer, Lukoil, announced a unilateral cap on gasoline prices Monday with immediate effect. Another major oil company, TNK-BP, which is a 50-percent joint venture with British oil giant BP, declined to confirm the price freeze, but said it would make an announcement Tuesday.
"We support the government's efforts to ease up tensions on the fuel market," TNK-BP spokeswoman Marina Dracheva told The Associated Press.
In a statement, Lukoil blamed high mineral-resource taxes that are pegged to world prices, as well as under-investment in domestic refineries.
I don't care if it rains or freezes, as long as I got my plastic Jesus, riding on the dashboard of my car.
Bad, bad idea.
I have a hunch they won't go DOWN, either.
wow must give a misty eye to the old bolsheviks
the mother russia rises again to f'up the supply and demand
its not like ruskies are not sitting on top of 2nd largest oil reserves...
this oil thing is a joke...
btw hope that the current hurricane does not slam into rigs.
Because it's irridescent.
I don't care if things get hairy, s'long as I got MAGNETIC MARY, sitting on the dashboard of my car.
Peter, Luke, John and Paul ... Jesus Christ, I gottem all! Sitting on the dashboard of my car....
"Strategic National Asset"
Short term, this could end up being a boost for Russia's entire economy. The question is, now that the oil industry in Russia is controlled by the Kremlin, will the Kremlin hold back exports to boost Russia's internal economy, and push up oil prices across the world to increase profits for the oil companies?
How much will the artificially created increased demand within Russia reduce the available oil for export to the rest of the world?
http://www.eia.doe.gov/emeu/cabs/russia.html
Doesn't look like a bad idea from the Kremlin's view. $2.52 a gallon for gas is still an outrageously high price for the huge majority of Russians. That's the equivalent to gas costing ~$32 a gallon in the US, using the old PPP purchasing-power parity numbers for 2005.
Plus, as the link shows, it's wealthy Europeans who will mostly be supplementing this policy.
This is just another move in the pipeline deals that Russia has been fighting for the last 15 years. Bits and pieces have been documented on FR over the years.
Thanks for the information. I must agree that I don't know enough about all of the aspects of the situation to comment intelligently.
Russia is a major exporter of fuel. They will not run out of gas. That way domestic economy of Russia will be shielded from the rise of gasoline prices.
It will rather stabilize the domestic consumption and export levels. There is no reason for consumption going up when prices stay frozen.
And 12 cent a gallon gas causes massive shortages in Venezuela? How about that 78 cent per gallon in Kuwait? Perhaps the 38 cents a gallon in Nigeria? See the trend yet?
The fact is, if you have surplus domestic production and export controls, you can restrict gasoline price to whatever you choose and you will not have shortages.
If the United States had suplus production and restricted the price to .50/gallon it'd be all of 3 days before the country stopped moving.
Something to note, their lowest standard of gas is 93 octane, our highest.
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