The Federal Antimonopoly Service (FAS) has set a clear expectation for how gasoline prices should move in the Russian Federation, aiming for alignment with inflation or staying below it through the end of 2022, even after the dampening effect introduced in September. This view was reported by TASS, with Vitaly Korolev, a deputy head of the federal anti-monopoly body, quoted as emphasizing the stabilizing forces that keep consumer costs from drifting away from the overall price level. The policy stance signals a deliberate effort to shield households from sudden price shocks while allowing energy-market participants to adjust to evolving conditions within the sector. Observers recognize this as a balancing act designed to maintain affordability for households while preserving fair operating space for firms amid shifting macroeconomic conditions.
The logic behind tethering retail fuel prices to inflation rests on a long pricing history. For an extended period, retail fuel costs tracked more slowly than the general price level, resulting in muted increases for gasoline and diesel even as other sectors faced price pressures. This pattern meant that, by year-end, the cumulative effect of earlier pricing dynamics would be at or below the inflation rate. The FAS argues that delaying any needed adjustments to the damping mechanism could complicate the market environment and reintroduce a risk of price acceleration. Korolev stressed that postponing the adjustment before 2023 would be counterproductive because it could intensify market pressures and place new pricing risks on authorities. In short, the service does not see a justification for reviving temporary relief measures that could undermine price discipline or transfer costs onto the state and taxpayers.
Central to this discussion is the damping mechanism, a policy instrument designed to stabilize the domestic price path by offsetting divergences between domestic fuel prices and higher export prices when the latter exceed a reference level. In such a scenario, the state reimburses producers for part of the gap, dampening abrupt shifts in consumer prices. Conversely, when export earnings fall short of the domestic baseline, oil companies can convert part of their margins into government revenue. The Treasury department extended the damping window from September to December 31, 2022, altering the payment structure so that transfers to oil producers diminished substantially. This adjustment aimed to support price stability for consumers while preserving a predictable revenue stream for the budget. It underscored the government’s intention to align policy tools with evolving market realities, ensuring that any subsidy-like support does not devolve into persistent overcompensation or market distortions. Taken together, these calibrations reflect a wider effort to reconcile competitive dynamics with macroeconomic goals, including inflation targeting, budgetary discipline, and the ongoing evaluation of how best to cushion citizens from energy-price volatility without eroding the incentives that drive investment and efficiency in the sector.