Prices for gasoline in Armenia will continue to grow

ArmInfo. The prices for gasoline  in Armenia will continue to grow, although a new sharp jump should  not be expected yet. On average, automobile fuel prices in the  country rose by 6-8% over the past month, to 480 drams per liter of  A95.

According to Gazety.ru, gasoline prices in Russia for the week from  May 21 to 27 grew by 88-90 cents. At the same time, the cost of AI-92  fuel increased by 90 cents to 42.21 rubles per liter, and the price  for AI-95 gasoline added 88 cents and reached 45.5 rubles. That is,  the price rose by only 1.5% - 2%.

According to opinion of economic experts ArmInfo, the rise in prices  will be conditioned not only by the factor of their appreciable  increase in Russia due to the growth of world oil prices, but also  because the gasoline supplies to Armenia are not geographically  diversified and go exclusively from this country along the line  company Rosneft, which is the operator of the intergovernmental  agreement of 2013 on duty-free supplies of various types of oil  products to Armenia. In the current year, Rosneft will supply 210,000  tons of oil products to Armenia for a total of $ 175 million.

Moreover, the rise in prices is also due to another important factor:  the presence of monopolies in the domestic market through the  presence of informal quotas placed between the two main intermediary  monopoly-trader companies-monopolists.

Several years ago, 5 oil traders supplied petrol and diesel fuel to  Armenia not only from Russia, but also from Romania and Bulgaria. But  even then, the price jumps, due to the monopoly on imports, were  often too harsh and unjustified in time and depended on both  international oil prices and fluctuations in the dollar exchange rate  within the country. The presence of sufficient quantities of imported  fuel at the tank farms did not reduce the sharpness of price  fluctuations, since monopolists - importers immediately fixed future  profits. As long as the situation with monopolies in this sphere does  not change, Armenia, which does not have its own refineries, will  mirror the price situation in Russia with an additional surcharge of  0.20 euro per liter, especially since by 2025 it has to earn a  unified fuel -Energy power market. But by this time domestic prices  in Russia, most likely, will approach the level of European - 1,2  -1,5 euros per liter. And the project of building an oil refinery on  the Armenian-Iranian border, which could smooth the situation,  remained on paper.

To note, some CIS countries, for fear of sharp price jumps, are  taking their own protective measures. So Kazakhstan decided to stop  importing Russian fuel into the country for a while. Its refineries  will provide it. However, Kazakh experts understand that this is only  a temporary way out, an opportunity to avoid jumps and ensure a  smooth increase in prices.

An important factor in the absence of a direct and strong effect of  gasoline prices on the country's microeconomics and on the  inflationary macro-situation is the fact that about 80% of vehicles  in Armenia operate on gas fuel. However, high prices for gasoline and  diesel fuel significantly increase the costs of agricultural  producers.