Not to pay attention to good news – that is a feature of Russian mentality. Within last year, petrol prices were not changing in St Petersburg. Against the background of the general inflation level – 18 percent – oil seems to have became cheaper. If present tendencies remain, in 2002 petrol will really become by 10-15 percent cheaper in St Petersburg, but now already in absolute prices, analysts conclude. According to them, the reason is cataclysms in the world oil market. Within the year 2001, world oil prices decreased oftener, than increased. In December, oil prices were near to the critical mark - $ 10.00 for a barrel. With such prices, it is unprofitable for Russian producers to sell oil to the West. Prime cost of Russian oil is about $ 8.00 for a barrel (without transport charges). So, Russian oil hardly could compete with Arabian one, whose prime cost makes up about $ 3.00 for a barrel. Taking into account all these tendencies, the Russian government decided to reduce oil export in 2002, even at the cost of budget depletion. And what to do with oil in such situation? To put to refining, of course. Within the whole year, facility of Russian petroleum-refining works did not decrease. As a result, the internal market was overfilled with petrol. Besides, in St Petersburg the system of filling stations was enlarged, this business became profitable. While the growing competition also furthered reduction of prices. Petroleum sale prices decreased: in April a ton of A-78 petrol cost in petroleum-refining works on average 7.400 rubles (about $255.00), while now it costs 7.200 rubles (about $240.00). Sooner or later, purchaising costs also will decrease. Probably, already in February, or even by the end of January: Christmas holidays during which motorists actively refuelled their cars for long trips are over.
Marina Mayakova PRAVDA.Ru St Petersburg
Translated by Vera Solovieva
ITAR-TASS photograph: A filling station of Peterburgskaya Toplivnaya Compania holding that offers high quality petrol ‘Evro’.
Read the original in Russian: http://pravda.ru/main/2002/01/09/35413.html