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. Last Updated: 07/27/2016

Gasoline Prices Rise 15 Percent

Gasoline prices in Russia have risen by an average of 15 percent this week with Moscow taking the lead, a move many analysts link to the re-evaluation of oil companies' fixed assets last month.


A liter of A-92 fuel in Moscow now costs 2,100 rubles (44 cents) instead of 1,800 rubles at state-owned stations, and prices for A-76 rose to 1,700 rubles from 1,500 rubles. Diesel fuel prices increased to 1,200 rubles from 1,000 rubles.


The price for A-95 grade fuel, the type used by foreign-make cars, was left unchanged as most of it is imported into the country from Europe.


Yukos oil company said last week it planned to raise prices for petroleum products by between 17 percent and 25 percent depending on the product, Interfax quoted Yukos vice president Eduard Grushevenko as saying.


However, Lukoil, the biggest oil producer in Russia, announced Tuesday that it would not raise prices significantly this month as a result of a meeting Russian First Deputy Prime Minister Vladimir Kadannikov had with top Russian oil bosses last Thursday.


"The company may increase the prices slightly only because of inflation," said a statement by Lukoil's president Vagit Alekperov.


Government proposals to re-evaluate the oil companies' fixed assets early last month at 2.8 times their 1994 value to account for last year's 131 percent inflation rate caused outcry from the oil industry.


In response to the complaints, the government has worked out a scheme of indexation that will see depreciation deductions increase in line with the value of fixed assets, Interfax quoted Kadannikov as saying Monday.


Kadannikov said the scheme will go into effect next month, and oil producers and analysts hailed the move Tuesday.


"Lukoil has reacted positively to the steps the government is taking to reduce the burden of the indexation of the fixed assets," said Petr Neyev, Lukoil's spokesman.


"The oil companies will be able to control their production expenses by varying the depreciation costs," said Igor Tsukanov, general director of the consultancy company CentreInvest Group.