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Belneftekhim Has New Reasons for Gasoline Price Growth, Economist Says

Belneftekhim Has New Reasons for Gasoline Price Growth, Economist Says

The story of the gasoline price increase is a "long-playing" record.

May 9, Vitsebsk residents complained about low-quality gasoline of Belneftekhim. "Instead of 92 RON, they use some kind of dirt. A car stalls a few minutes after refueling. The traction is lost," Vitsebsk driver wrote to Basta telegram-channel.

Following this, messages of Belarusians were posted on Facebook. "Fuel quality at petrol stations of Belarus has recently been disgusting. That's the reaction of the car," Viktar Harbachou, an entrepreneur from Barysau, writes.

Charter97.org asked economist Leu Marholin for comments.

- Belneftekhim said that 5 million tons of dirty oil got into Druzhba, which is comparable to the monthly volume of pumping. Can the deterioration of gasoline quality at petrol stations relate to the incident with the Russian polluted oil?

- Of course, it is related to the quality of oil supplies to Belarusian refineries. This raw material has affected the operation of equipment, primarily at the Mozyr refinery. And even if the dirty oil flow is isolated, the equipment, primarily filters, has been damaged - and it couldn't but affect the quality of gasoline at Belarusian petrol stations. It's natural.

- Even before the incident, the refineries had complained about equipment deterioration and asked money to update it. Will these accents be intensified now?

- First of all, I guess this incident is not unique. If the Russian Ministry of Energy claims that some companies in Samara have tried to solve their commercial issues in this way, then it is likely that they (they are not the only ones) have tried to solve them in the same way before. Perhaps the scale was not as big as now.

You know, oil can be not only of poor quality, but also of "extremely high quality". The amount of the second one is almost impossible to track. Therefore, low-quality gasoline at Belarusian gas stations is a long-playing record.

As for the equipment of our refineries, the replacement of equipment can be very expensive: if only filters are out of order, they can be easily replaced, but it may cause damage to complex and expensive imported equipment. Therefore, yes, the refineries will focus on the need for additional funds.

- How will they look for these funds? Gasoline gets more expensive every Sunday, while Belneftekhim declares that it simply "chases" the growth of prices for raw materials from Russia...

- Well, it's necessary to demand compensation from the guilty party, i.e. from Russia.

But I'd like to say that Belneftekhim is a trickster: its price growth does not relate to the price growth of oil in Russia. Of course, it is becoming more expensive objectively. But we remember that in due time when oil cost $100, we had cheaper gasoline.

Here, most likely, we are talking about a willingness to compensate for consequences of the tax maneuver. Belneftekhim realises that Russia will not compensate for the damage, and tries to shift all possible losses (only this year the figure of $300 million was called) on shoulders of consumers of Belarus.

- Does the incident with "dirty" oil give Belneftekhim additional grounds to raise gasoline prices?

- Of course, the concern will demand some compensation. And it will use low-quality oil and losses from it as its "trump card".

But it is unlikely to get it from Russia. Because the approach of Russia is simple: it is the fault of a commercial entity, and disputes should be resolved by commercial entities. And it's the problem for the Belarusian side: if a commercial entity from Russia goes bankrupt, the issue is closed.

Therefore, the incident with "dirty" oil will be an argument for further growth of gasoline prices in the country, because it is a quite good reason to shift the problems on shoulders of Belarusian consumers.

– And how long will this price growth continue?

- The limit is the moment of public outrage. The fact is that the growth in gasoline prices does not only affect those who drive to their summer houses.

This is a global problem with far-reaching consequences.

The rise in gasoline prices affects everything, because the transport component is present in any production: bread production, clothing production, equipment production. All these spheres are connected with transport and, accordingly, with fuel. Therefore, it will have a direct impact on inflation in Belarus.

And the authorities will keep increasing the price by a kopeck. And it will stop only when the people start to resent.

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