Barys Zhaliba: Fuel prices to go up in Belarus

Fuel prices are falling all over the world, but they will grow in Belarus.

Vitali Paulau, a deputy head of Belneftekhim concern, said yesterday petrol price couldn't be pegged to the dollar rate if global oil prices are lower than $80 a barrel. He added that fuel price must depend on “many factors”.

Does it mean that the Belarusian authorities prepare to give motorists another surprise and raise fuel prices?

Doctor Economics Professor Barys Zhaliba spoke to charter97.org about it.

“In our country, fuel price is regulated by the state rather than by the market. A drop in oil prices leads to lower fuel prices in the world, but it doesn't happen in our country. Belneftekhim concern doesn't feel comfortable to speak about an increase in the petrol price because world oil prices hit the record low of the last 9 years.

But our country differs from the others. They feel uncomfortable to speak about the price increase, but they don't have another choice. What makes them do it? The difficult situation at domestic oil refineries, I suppose, as well as the difficult situation with revenues to the budget, where export duties on oil products make a significant share.

The state budget lacks money, and Belneftekhim has to make such statements. As our experience shows, fuel prices are usually raised after such statements by executives. They prepare society for another increase in fuel prices.

Market rules don't work with fuel prices in our country. Petrol prices contain a high share of taxes and excise duties, which makes them an important source of revenues to the budget. The country doesn't have money, so we are not surprised to learn that the petrol price will grow in Belarus though it is falling all over the world,” Barys Zhaliba says.

The latest increase in fuel prices in Belarus was in January 2015.