Economist On ‘Petrol Games’: Lukashenka Fears People

The prices for fuel will be risen by 1 kapeyka further on.

A week after the last price increase, the prices at the Belarusian gas stations rose again ... For the already predictable amount - one kapeyka. Car owners got used to the tactics of a gradual increase in fuel prices last year, but they noticed that this year Belneftekhim changes the numbers on refueling boards one and a half times more often. In less than five months, fuel has already risen in price by 8.45%, Belsat reports.

Without change, these figures lasted a week. And again - each type of fuel went up for a kapeyka.

“For one kapeyka – this goes unnoticed,” say the residents of Minsk.

“It becomes more expensive, but I didn’t see any significant expenditures for myself,” they say.

“The increase in fuel prices by 1 kapeyka does not hit the budget as much as if it were increased dramatically. True, I do not know how much oil has risen in price and how much prices have risen relative to oil,” they say.

“The uncertainty! It would be better if they raised the prices adequately. It is clear that there is a tie to the dollar - then raise it right away, why do do it kapeyka by kapeyka? ”, Minsk residents say.

“1 kapeyka is unnoticeable,” the respondents believe.

By raising the price for fuel once or three times a month and each time only for one kapeyka, Belneftekhim confused the consumer. No one is able to estimate whether the price is changing significantly.

“The government is afraid of the people, that if they raise prices for 20 kapeykas in one week, there will be some kind of unrest. It happened once, remember, when drivers drove to the avenue and went in columns, signaling against the price increase,” says economist Leanid Zlotnikau.

The “Stop Petrol” campaign in the summer of 2011 is one of only a few protest waves organized under the current government. Then the drivers responded to a 30 percent jump in prices at gas stations. The state has made conclusions, but cannot raise the prices of petroleum products. Due to the tax maneuver of Moscow since the beginning of the year, the price of the Russian oil, which Belarus is buying, has been increasing.

“Previously, the export duty remained at the disposal of Belarus, that is, we received the Russian oil without the export duty, processed and sold products and crude oil already with export duty. We sold it in the world market and kept almost all the duty,” says Leanid Zlotnikau.

This duty amounted to almost half the cost of a liter of Urals oil. The negotiations on Moscow’s compensation for these losses are dragging on, the oil extraction tax is growing, and Belneftekhim’s revenues have fallen since the beginning of the year. Together with today's price changes for another kapeyka, the concern reassures: “The cost of the Belarusian motor fuel remains at a lower level than in the neighboring countries, except Russia, which has enough of its own hydrocarbon raw materials.”

The cost of petrol and diesel fuel in Ukraine is 40-48% higher, and in the Baltics and Poland - 58-80% higher than in our country.

After four and a half years, Belarusian refineries will buy oil in Russia at world prices and will not be able to compete with the West on the world market, Leanid Zlotnikau believes.

The state concern Belneftekhim will partially balance its losses due to the rise in prices in the domestic market. Last year, the fuel prices grew by an average of 2 kapeykas per month. In the first 5 months of this year - already by 3 kapeykas.