Petrol Price Paradox

Petrol rises in price while oil prices falling


Growing petrol prices surprised the president of Russia. Vladimir Putin complained about price hike for oil products in the country against the record fall of world oil prices. The president addressed his question to the government’s members during a regular meeting and committed to get the price formation under control.

“Some things raise questions. For instance, the prices of oil products grew by 10% as of December 1 whereas world oil prices fell by 35%. What is more, the main growth is seen in retail sales while in the wholesale sector prices are falling. What is FAS (Federal Antimonopoly Service of Russia) doing?” the Russian president said. The situation in this sector indeed seems quite illogical. Given the current financial crisis, petrol producers put extra pressure on consumers.


Also the president touched upon the topic of import substitution and noted that import ban on some food products was temporary. In terms of current international economy any unilateral or mutual restrictions hit each party.

“It is clear that some things are objective: all that for imports is, given that the national currency has changed due to changes in world energy prices.

There are objective things. The second objective reason – the fact that we have restricted the import of food. I think that this is a temporary phenomenon”, the president added.