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Russia to cut excise duties on diesel fuel, gasoline starting from June 1

May 31, 21:17 UTC+3 MOSCOW

The government believes this measure will allow to stabilize prices for oil products

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© Artem Geodakyan/TASS

MOSCOW, May 31. /TASS/. The Russian government will cut excise duties on gasoline and diesel fuel by 3,000 and 2,000 rubles ($48-32) per tonne respectively from June 1, an official that took part in the meeting with Deputy Prime Minister Dmitry Kozak, who is in charge of energy issues told reporters.

At the same time, the government may continue to cut excise duties, and from July 1 they may be reduced by another 700 rubles ($11), the official said.

"The government is considering the possibility to further reduce the excise duties on automobile gasoline and diesel fuel by 700 rubles per tonne from July 1, 2018. The earlier decision to reduce excise duty rates for motor gasoline by 3,000 rubles and for diesel fuel by 2,000 rubles will come into effect from June 1, 2018," the participant of the meeting said.

The representative of Kozak confirmed the discussion in the government about further reduction of the fiscal burden to stabilize the situation in the fuel market.

The Russian authorities had to think about lowering excise duties on oil products following a hike in gasoline prices, which has been observed since the beginning of the year.

According to the Federal State Statistics Service (Rosstat). the average consumer gasoline prices rose by 0.8 rubles over the week from May 21 to 27, 2018 and amounted to 44.73 rubles ($0.72) rubles per liter respectively. Gasoline prices rose 7.3% and diesel fuel prices are up 7.9% from the year beginning, the statistical service said.

Prices hiked to 41.09 rubles ($0.66) a liter for regular (Ai-92), to 44.06 rubles ($0.69) for premium (Ai-95) gasoline, and to 49.06 rubles ($0.79) per liter for Ai-98 grade gasoline. Diesel fuel prices added 0.81% and rose to 43.91 rubles ($0.7) per liter.

In order to curb the price rise in the domestic market, the government instructed the Finance Ministry to study the possibility of reducing excise taxes on gasoline and diesel fuel.

According to Kozak, this measure will only allow to stabilize prices for oil products and not to lower them.

First Deputy Prime Minister, Finance Minister Anton Siluanov estimated the decline in budget revenues from the reduction of excise taxes on fuel at 140 bln rubles ($2.2 bln). The government should determine the sources of compensation for falling incomes in autumn - these will be either additional non-oil revenues or borrowing, Siluanov said.

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