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The Cabinet of Ministers will be flooded with paperwork: prices at petrol stations were taken under control

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Photo: Rudy and Peter Skitterians/Pixabay

Photo: Rudy and Peter Skitterians/Pixabay

The government obliged the petrol station chains to report on the increase in prices for petroleum products by more than 1%.

The corresponding decree No. 450 was promulgated on May 11 on the Cabinet of Ministers website. According to the document, diesel fuel and gasoline grades A-92 and A-95 were added to the list of essential goods.

The decree states that the declaration of changes in retail prices for these goods is carried out in the case of an increase in the goods retail price by 1% or more in comparison with the price at the time of declaring 20 days before the new price enters into force (excluding the day of declaration).

Market participants and subject matter experts perceived this initiative ambiguously. According to Gennady Ryabtsev, Director of special projects of the STC Psyche, the government's decision will be impossible to implement.

«It is very difficult for me to imagine how this decision will be implemented, since it is very divorced from the realities of the market. If you open the register of retail prices, you can see that over the past year, 476 enterprises have declared something. These are retailers: pharmacies, grocery stores, etc. Therefore, I get the impression that this is done for the sake of appearance at the request to do at least something. Moreover, it is worth paying attention to the date of this decision—March 29. The question arises: where was this solution for a month and a half? Why was the draft of this decision not promulgated on the Ministry for Development of Economy website (as it should be, a month before it is submitted to the Cabinet of Ministers)? Where are the results of this decision discussion?»

Gennady Ryabtsev

Gennady Ryabtsev

Director of special projects of the Psyche Scientific-Technical Center "Psyche"

Sergei Kuyun Director at the Consulting group A-95, agrees with him. According to him, the published decree is a demonstration of the unprofessionalism and helplessness of officials who cannot understand the situation on the fuel market.

«We have one of the simplest markets: we are 80% dependent on imports, we buy this fuel at understandable prices and understand what the taxation base is there. We can decompose all this and see if these prices are objective, why they change in this way, what they depend on, etc. Our officials are sure that there is some kind of collusion and that prices are regulated by someone. At the same time, they choose an incomprehensible regulation mechanism. I would understand if it was state regulation, but there is some declaration of gasoline, but no declaration of liquefied gas. Despite the fact that gas at petrol stations is already sold more than gasoline. This is just an attempt to make things lively for someone.»

Sergei Kuyun

Sergei Kuyun

Director at the Consulting group A-95

Petrol station chains also do not understand the need for the measures taken. Leonid Kosianchuk, CEO at SunOil petrol station chain, does not see expediency and common sense in this decision.

«How can a possible increase in prices in 20 days be declared, given the volatility of the external market, on which we are completely dependent? To predict that in 20 days I, tentatively speaking, will raise the price by 28 kopecks is nonsense. Most likely, market operators will declare price increases in 20 days every day. And the decision on whether to raise the prices or not will be made closer to this date. Since there is a fine for a price increase without declaring, and for not raising them, according to the declaration, there is no such a fine. We will simply flood the Cabinet of Ministers with paperwork.»

Leonid Kosianchuk

Leonid Kosianchuk

CEO at SunOil

According to Sergiy Fedorenko, Chief Commercial Officer at Ukrgasvydobuvannya (owns the petrol stations chain of the same name), the decision will not affect prices.

«The story is that a memorandum was signed earlier, where the Cabinet of Ministers informally asked not to raise fuel prices more than 30 UAH per liter. Otherwise, they promised to impose some kind of additional regulation. But due to the fact that oil quotations have recently grown to $68—70 per barrel, the price tag during the May holidays exceeded this unspoken figure of 30 UAH. Thus, the Cabinet of Ministers took retaliatory measures.»

Sergiy Fedorenko

Sergiy Fedorenko

Chief Commercial Officer, Ukrgasvydobuvannya

Recall that the Cabinet of Ministers and Ukrainian Oil and Gas Association signed a memorandum of intent to create a favorable environment, develop fair competition in the oil product market and meet the needs of consumers during the quarantine period.

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