Vladimir Putin signed the law on increase of excises on gasoline and diesel fuel from April 1 — it will be the second increase since the beginning of the year. The excise rate for gasoline will grow by 2 rubles. per liter, diesel fuel — by 1 RUR per liter. The Finance Ministry estimates, the excise tax increase would increase retail gasoline prices by 6.5–7%. Because of this, overall inflation may be larger by 0.3–0.4 percentage points.
The increase of excise duties has a direct and indirect impact on the General price level in the economy. On the one hand, fuel price is directly included in the consumer price index (CPI). The weight of petrol in CPI in 2016 is 3.17%, respectively, of a direct increase in the price level will be about 0.2 percentage points assuming that the price of gasoline will grow by 6.5–7%, predicts the Ministry of Finance.
Indirect impact — the increase in transportation costs manufacturers and retailers. Taking into account the increase of inflation might be 0.3–0.4 percentage points — about twice the direct effect on CPI, a rough estimate leads Nikolai Kondrashov, leading expert of the Institute “development Center” HSE. The situation with excise taxes may also be reflected in inflation expectations, he admits.
The consequences of raising excise taxes on gasoline is not so strong if compared with the effects from the depreciation of the ruble and the fall in consumer demand, says ING chief economist Dmitry Polevoy. Given that the government quite actively monitors retail prices, in fact their increase may not occur, or it may be lower than the estimate coming from the assumption that growth of excises on gasoline will be fully passed on to the consumer, he says. “The increase is possible, but most likely transfer one-to-one, the authorities will try to prevent. This can be at the level of informal contacts with the oil companies, or the increase will be spread over time, so it was not so painful” — said the expert.
“We have a trend: when prices rise, they rise more than the increase in some excise, just because you need constant margin”, — says the Professor of Finance NES Oleg Shibanov.
Separately it is necessary to understand the specifics of transportation: they do not “disposable” — on the one hand, are carried out between the cities and inside the cities is the conveyance of the goods to the shops, says Shibanov. Finally, there is the effect of increasing prices on demand on substitution products, transport.
The excise tax is not a tax
The growth of excise rates on petrol AI-95 will be 34%, but since the excise tax is not more than 30% in the price of gasoline, increase of excise duty will affect the end cost of fuel is insignificant price increases on a 2.36 rubles. by the end of 2016 (+6,5%), said last week the state Secretary of the Ministry of Finance Yuriy Zubarev at a meeting of the Duma Committee on the budget. Growth in gasoline prices for consumers, the Finance Ministry expects in the third quarter of 2016 — by which time the manufacturers will pass the increased cost of the excise tax on consumers.
Increase in excise tax — a measure of mobilization: the government is looking for all possible sources of replenishment of the budget, noted Zubarev. Additional revenues from increased fuel excise, the Ministry of Finance assesses in 2016 in to 89.3 billion rubles. But consider this a violation of the moratorium on changing tax environment for business cannot: increase the excise duties and tax conditions and taxes don’t change, said the representative of the Ministry of Finance.
The Chairman of the Committee on budget Andrey Makarov sure that gasoline prices will start to rise even before the entry into force of law from 1 April. Excise duties increase will affect the cost of agriculture and the army, but the government has not provided relevant calculations in the explanatory note to the bill, complained the MP on 24 February.
Transport costs will be passed on in the prices of many commodities, agrees chief economist at Royal Bank of Scotland in Russia Tatiana Orlova, to predict this effect, in fact, impossible, since we are talking about the decisions of individual sellers. “Imagine you own a supermarket, you went up the delivery of products from any of wholesale suppliers — says the expert. — You can move it in the selling price, do not move, can choose some intermediate variant, 30-50%. It depends on the financial condition of a particular store owner — if he has some stock of “fat” that he can use and not be at a loss”.
The increase in excise duties does not necessarily lead to an increase in gasoline prices by the same amount, said the representative of the Ministry of economic development, especially “in the context of significant demand constraints of the population.” “In addition, lower export duties on fuel in 2016, giving producers additional profit from exports. In these circumstances, the manufacturer may re-allocate the yield between domestic market and exports,” reported the press service of the Agency in response to questions .
Inflation in Russia at the end of 2016 is estimated at 7-7. 5 per cent after a 12.9 per cent last year, said the Minister of economic development Alexei Ulyukayev earlier in February.