MOSCOW, September 19 (RIA Novosti) - Russian oil major LUKoil will fix retail prices for gasoline and diesel at its gas stations in Russia until year's end, starting Sept. 19, company president Vagit Alekperov said Monday. "This step will allow fuel price growth to be restrained and constructive dialogue to continue between the Russian government and oil companies, in order to stabilize domestic prices for oil products," Alekperov was quoted as saying in a company press release.
LUKoil owns four oil refineries in Russia and about 1500 gas stations, including rented and franchised stations.
LUKoil says that to deal with the situation on the fuel market, the system under which mineral resource tax is indexed to the world oil price should be ended, a boost in consumption of diesel in Russia should be promoted and large investment for the modernization of the oil-refining segment should be encouraged.
The company believes that the main causes of growth in domestic prices for oil products are their dependence on world prices and the proportional increase in the tax burden, growth in consumption inside the country under limited supply and the substantial number of fueling station networks (65%) that are not part of vertically integrated companies.
The press service said from December 2004 until May 2005, LUKoil unilaterally lowered by 5% and froze retail prices for gasoline and diesel at its gas stations in Russia.
