CBR Deputy Chairman Alexey Ulyukayev has another lever to fight inflation – the gap between calculated and real prices for crude oil.
Photo: Vasily Shaposhnikov
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Decline in Oil Prices to Curb Inflation
The export duties on crude oil in Russia soared to the record $237.6/ton October 1. In the Central Bank (CBR), they think the duties calculated in time of the peak prices will allow the government to fight inflation. At least till December, the actual sterilization of the oil dollars in the Stabilization Fund will be excessive if compared with the current prices for crude oil.
On September 16, Russia’s PM Mikhail Fradkov signed another ruling to hike export duties on crude oil and oil product. The ruling took effect October 1, so the current oil duty amounts to $237.6/ton instead of $216.4/ton, and the basic oil product has $172.4/ton instead of $158.1/tons.
The government comes up with the duties regulations once in two months, calculating the rates in view of the Urals average taken for the last two months. But the October duties take into account the peak prices for Urals happened in early August, i.e. 72/barrel, according to Platts. Therefore, the oil companies of Russia that used to settle duties to the budget calculated in view of the Brent prices of more than $70/barrel during the previous two months will have to continue paying the same amount notwithstanding that Brent costs less than $58/barrel today.
The Central Bank of Russia is set to benefit from this unusual situation. In October, the growth of consumer price index may materially slow down on lower prices for crude oil, Alexey Ulyukayev, who is the first deputy chairman of CBR, said past Saturday. In the CBR, they count on today’s gap to maintain the annual target inflation of 9 percent set for 2006. “We still forecast the inflation of 8.5 percent by results of this year,” Ulyukayev pointed out, emphasizing though that 8.5 percent could be surpassed if “the prices for housing and consumer services, for example, start going up all of a sudden.”
www.kommersant.com
All the Article in Russian as of Oct. 02, 2006
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