Bill: Regulation of gasoline prices back to a planned economy?

The state will have the right to regulate the price of fuel from 2019?

In the state Duma of the Russian Federation from the Communist party introduced a bill according to which in Russia it is proposed to introduce state regulation of prices for gasoline and diesel fuel. The intentions of the legislators good – to protect the population their interests and wallets from the encroachments of the oil giants. According to the document, from 1 January 2019 is expected to introduce state regulation of gasoline prices for cars of all classes, as well as on diesel fuel. Under state regulation also fall trade allowances to the price of fuel. The mechanism will work by establishing their limits.

To set a limit on prices since the beginning of 2019 will be the Government.

Changes to the Federal law from December 28, 2009 No Э81-FZ “About bases of state regulation of trade activities in the Russian Federation”.

As stated in the explanatory note to the document: “the Sharp increase in prices for fuels and lubricants in the domestic market of the Russian Federation in the first half of 2018 has caused strong discontent of the population, the growth of social tensions and a series of protest actions in the regions.

The reasons of growth of prices for fuels and lubricants in the domestic market of the Russian Federation are mainly non-market in nature, and are associated with the implementation of the tax maneuver involving the simultaneous increase in the tax on mineral extraction and export duties on oil. This has led to the fact that the export market has become the premium relative to the domestic market, and domestic prices for petroleum products has increased.”

With the purpose of the legislature to provide a mechanism aimed at protecting the interests of ordinary consumers, the bill provides for the introduction of state regulation of prices for gasoline and diesel fuel.

The increase in fuel prices is definitely the undermining of the strategic and economic security of the country. After all, the price increase per ruble of gasoline, diesel fuel and even of fuel oil, one way or another affects the increase in prices of all goods and services, including those provided by the state. It is not only the need for more than the population of banknotes to pay out of pocket for the purchase of material goods and receiving service, not so much a powerful blow to the wallets of motorists and companies engaged in cargo transportation (however, the latter can always shift the burden on to the consumer, i.e. most of us), but inhibition of the development of the whole country. Remember declared the slogan of import substitution, declared in 2014? So, high energy prices will actively slow down this process. However, there is one important BUT. To regulate prices must be smart.

Because of this, we are invited by the Communist party on the measure of state regulation of prices, is dangerous because it undermines the principles of competition and free markets. Similar experiments in the crackdown, but in another way this bill can interpret it is not seen as possible, excessively rough cuts off possible sensitive economic maneuvers, this makes the economy sluggish and the bone, as it was in Soviet times. And where there is no alternative, there is at critical moments can be a lot of follies, to make serious mistakes.

Even such a violent and unsubstantiated price increase for gasoline/diesel fuel (from the standpoint of the market) does not mean the need to introduce state regulation of the fuel market. Because the time to make real stock market had enough fuel and didn’t need to create favorable conditions for oil companies under which it would be so profitable to sell fuel supplies to the West for dollars.

In General, questions about the project a lot, but the answers are too little.

Also we will remind that now the state is able to influence the market nefteproduktov and crude oil through tax policy, excise taxes and duties, direct price regulation on oil products does not exist. Ruled by the so-called “invisible hand of the market”.