25 March 2019, Monday, 17:44
A Challenge for Everyone

"Tax on Luxury" Adopted for Vehicles in Belarus


Gasoline prices will grow unless people stop it.

December 9 retail prices of diesel fuel and motor gasoline increased by 1 kopeck in Belarus. It has become the 26th price increase this year.

Why do gasoline prices rise with amazing regularity in Belarus when oil prices fall in the world market? What is the basis of this phenomenon of the national economy?

Economist Leanid Zlotnikau answers questions of Charter97.org:

- Several factors determine gasoline prices in our country.

First, it's oil refining ratio. It's lower than at European plants. Therefore, the same price for Belarusian and European producers may turn out to be unprofitable for our refineries, even if they raise it.

To date, one ton of fuel received by domestic producers is higher than the retail price in the domestic market. This is inevitable; refineries should have been modernized in time. The state did not find means for it and simply shifted this "financial support" on shoulders of those who bought motor fuel.

Secondly, in Belarus, the authorities have established a policy that the car and fuel are considered a luxury rather than means of transportation.

Car fuel is excised. The classic meaning of an excise is the tax on luxury as well as on cigarettes and alcohol. It turns out that cars in Belarus have the tax on luxury imposed. That is, the state is not just trying to create profitable production at the expense of citizens, but also to cover other budget needs.

There are many of them. The state is becoming poorer, Russia's support is sharply decreasing, and it is becoming increasingly difficult to ensure the level of consumption and social payments.

Therefore, gasoline price growth will be permanent: now they are raised for the sake of profitability of refineries, and then they will do it for the sake of other needs of the state.

- Why did Belneftekhim choose such tactics - to raise prices for a kopeck? And even conducted a survey: is it better to increase the cost of fuel at once or in stages?

- You know, it's just fear. Fear of a consumer, of ordinary Belarusians.

Do you remember events when gasoline prices started to grow in 2011? Just remember "Stop-Fuel" rally! Motorists began to organize strikes: to drive slowly along the central avenue, to gather in large numbers, to signal. The center of Minsk was beeping. These were demonstrations, which the authorities are very afraid of.

After all, these are not political actions, but a social protest, which covers a wide segment of the population.

I think Lukashenka got scared and said: "Price growth should be gradual". And Belneftekhim can't help but do it.

- But people know how to count... For example, independent journalists have found out that the price of fuel has increased six times over a ten-year period in Belarus.

- Prices have grown not only for gasoline. It's happened to everything. I guess it's more than six-time growth over ten years.

Once I calculated: over the past five years, prices have risen eightfold. It was two years ago. Now the situation is more severe.

Prices are growing all the time and for everything: this is the policy of the government. The authorities are engaged in "increasing" nominal incomes of the population regardless of possibilities of the economy. As a result, there is inflation, depreciation of money, rapid growth of prices for goods and services. And it's become the tradition.

That's why everything will increase in price, unless fundamental changes in the economy come.

- With this in mind, to what extent can the price of gasoline rise? After all, there will be no cheap oil from Russia, as in "fat years".

- To what extent will gasoline prices rise? As long as people tolerate it and allow the authorities to continue this policy.

And prices will rise for everything, not only for gasoline. Every 4-5 years prices are doubled.

- You said "as long as people tolerate it". How long will it continue?

- The revolution of "empty stomachs" starts as soon as a stomach is not full. When basic needs are not met.

Such revolutionary situation arises when not 5-10 but 50-60% of the population is beyond the point where their most basic needs cannot be met. And most of all, food needs.

The Belarusian statistics gives an inaccurate figure (according to the data of the National Statistical Committee, more than 3 million Belarusians, or almost 34% of the total population, cannot afford a minimum set of goods and services - editor's note).

In Russia, for example, 40% of the population works only for food. And at the same time, we see a rise in protest activity, popular slogans against the regime, and a rapid decline in Putin's rating.

If half of the population works only for food in Belarus, then we will have a very strong growth of protest moods.