04-03-06
Some 65 % of Russia's oil refineries are in need of major reconstruction
work, the deputy economic development and trade minister said.
Speaking at a meeting of the Federation Council, Russia's upper house of
parliament, Kirill Androsov said that an economic motivation for reconstruction
of oil refineries must be provided by using them to produce higher-quality
fuels.
"A stimulus for reconstruction must be provided not by nationalizing them,
but by using higher-quality fuels. When it's profitable to use high-quality
gasoline, oil companies will produce it," Androsov said, adding that this could
be done by lowering duties on high-quality fuels.
"The Economic Development and Trade Ministry does not think that dividing
vertically integrated oil companies would provide an additional motivation for
reconstructing oil refineries," he said. Of the price of AI-92 regular gasoline
as sold at filling stations, he said, "30 % goes to operational costs, 50 % goes
to tax and duties, while the profit to companies -- from oil field to gas pump
-- amounts to 20 %."
However, Androsov said that exerting direct state regulation on retail prices
for oil products would not resolve the problems of rising fuel prices.
"We have the example of Ukraine, where as a result of such regulation, supply
volume of oil products shrunk by 50 %, and within two weeks the Ukrainian
government admitted its mistake."
The gasoline price could be lowered by reducing the tax burden, he said. "Our
efforts should be focused on the tax part of the gasoline price, in particular
excises and mineral resource extraction tax."
The deputy minister also said that a government resolution had been drawn up on
motivating and organizing an exchange for trading in oil products.
Source: PIN/RIA Novosti