Petrol Price Can Spike

Most likely, Belarusian drivers will have to pay for the "modernization" of oil refining.

Aliaksandr Lukashenka has odered to cope with recession in oil refining.

– I have already said that this issue is akin to the independence of our state. We must work out a strategy to help oil refineries in the existing bad situation," – the dictator said at a meeting on the industry development strategy, at which the terms of modernization of Belarusian refineries were determined. It is planned to be completed in 2019, the amount involved is $ 1.2 billion.

The drop in profits due to the reduction in Russian oil supplies, the reduction in world oil prices and the freezing of prices for petroleum products within the country have significantly undermined the financial condition of oil refineries, Tatsiana Manionak, an expert on fuel and energy issues, believes.

And one should not expect a return to the previous level of profits in oil refining with the current world oil prices, the expert says in her interview to Your Country’s Tomorrow.

According to Tatsiana Manionak, the completion of the tax maneuver in Russia will bring prices for Russian energy resources closer to the world ones for Belarus. The modernization of the plants will increase the output of more liquid light oil products on the world markets.

– The refineries’ future depends on their early modernization," – the expert says.

But where can the money be found to complete the production update? During Aliaksandr Lukashenka's trip to China, there were talks about the possibility of allocating a $ 1 billion loan for these purposes.

– The main question is as follows: will this loan be tied? Belarusian plants mainly purchase technological equipment in Europe, so a tied loan will be unprofitable in this case. Perhaps, internal resources will be used – it is possible that the price of oil products will continue to increase in the domestic market, – Tatsiana Manionak predicts.

Belarus should have started to take care of an alternative to oil refining long time ago, she is convinced.

– Taking into account world trends, one must understand that oil refining will not be able fulfill the same function as in the previous years. Its time is over, – the expert believes.

Nevertheless, it is necessary to understand that the Belarusian authorities do not look far ahead. They operate mainly with prospects for the coming years, hoping that during this time, Russia will not manage to complete the tax maneuver. In addition, if the situation in the oil products market improves, the modernized enterprises will look more attractive to potential investors.