Russian President Vladimir Putin signed the law introducing corrections since July 1, 2019 into the currently used ‘damping’ mechanism for stabilization of gasoline and diesel fuel prices. The document was posted on the official web portal of legal information. The law also provides for introduction of such mechanism for jet fuel since August 1 of this year.
The ‘damping’ mechanism makes possible for the government to partly compensate lost profit to oil producers when supplying fuel to the domestic market if export prices turned out to be above conventional domestic ones.
The law will increase the amount of such compensation when correcting the ‘damper’ from 60% to 75% for gasoline and to 70% for diesel fuel in the first half of 2019, and to 68% for gasoline and 65% for diesel fuel since 2020. An extra ‘damper’ of 2,000 rubles ($31.7) per tonne is set in case of selling motor gasoline and diesel fuel on the bases of supplies in the Far Eastern Federal District.
The document also stipulates introduction of a mechanism to support air carriers, which is required because of strong growth of jet fuel prices in recent years.