Russian oil companies agree to freeze gas prices
Published Date | 2018 November 23
Russian oil companies have agreed to freeze gasoline prices in the country as a global deal to curb oil outputIndia: Russian drivers have to pay high fuel charges, on an average gas prices increased by almost 7% since May, above the annual inflation rate of around 4%. Though Russia enjoys low gasoline prices relative to most other countries, an average driver spends a disproportionately high share of a typical salary at the pump. Deputy Prime Minister Dmitry Kozak said that deals to freeze domestic gas prices were signed with oil companies between Nov. 7 and Nov. 10. The prices are frozen and will remain so taking into account inflation and changes in tax legislation until the end of March 2019. Russian authorities are keen to prevent fuel from becoming too costly because previous price spikes angered voters. The government is already taking a series of unpopular measures to raise more revenue for the budget and needs to tread carefully. Earlier this year, it raised the rate of value-added tax and sharply increased the pension age a move that knocked public support for President Vladimir Putin. The government and the largest oil producers hammered out a temporary deal to keep prices down on Oct. 31, avoiding tougher measures such as prohibitive oil export duties. Under the new deal, which will be in force from Nov. 1 until March 31, oil firms will ramp up petrol and diesel supplies to the domestic market by 3% per month versus the year-earlier period. According to BlueWeave Consulting, oil & gas industry is the leading sector in the world in terms of value. Energy demand is anticipated to grow at phenomenal space in developing economies to support continuous economic growth. High growth will be supported by demand for power, petrochemicals, and transportation. According to upcoming report by BlueWeave Consulting on “Global Oil & Gas Market, By Type, By Application, By Region- Industry Analysis, Size, Share, Growth, Trends & forecast by 2018-2025”, globally oil demand will rise exponentially owing to rapid globalization and industrial growth. The India government has implemented several new policies to fulfil the increasing demand for energy. The government has allowed 100% (FDI) in various segments of the sector which includes natural gas, refineries, and petroleum product. It attracts both foreign and public sector investment, thus over the years the market demand will increase owing to large energy demand from industrial sector.