Agenda: measures to maintain a stable situation in the fuel market, subsidies for the implementation of innovative projects, support for the AI industry.
Mikhail Mishustin’s opening remarks
Report by Alexander Novak on measures to maintain a stable situation in the fuel market
Meeting with deputy prime ministers on current issues
Meeting with deputy prime ministers on current issues
Report by Alexander Novak
Meeting with deputy prime ministers on current issues
Report by Alexander Novak on measures to maintain a stable situation in the fuel market
Excerpts from the transcript:
Mikhail Mishustin: Good morning, colleagues.
A fortnight ago, the Government decided to impose restrictions on the supply of oil products to foreign markets in order to stop the export of fuel necessary for domestic consumers. In particular, this was for the benefit of farmers, as the sowing campaign is underway, and for our motorists.
The work to improve the effectiveness of measures in this area is ongoing. It is important that strategic resources, which are all derivatives of oil – petrol and diesel fuel – are used to a greater extent in the interests of our country, and buyers can purchase them in the necessary quantity and at reasonable prices.
Mr Novak, tell us what has been done so far and what additional measures have been taken to maintain a stable situation on the fuel market.
Alexander Novak: Mr Mishustin.
As you noted, in order to normalise the prices in the domestic oil market, the Government introduced a temporary ban on the export of petrol and diesel fuel on 21 September.
This measure has proven effective. The restrictions have helped saturate the domestic fuel market, which in turn had a positive impact on prices.
The cost of petrol and diesel fuel on the St Petersburg International Commodity and Raw Materials Exchange decreased by 16 and 21 percent respectively.
According to the Ministry of Energy, diesel prices at small wholesale and oil depots have decreased by an average of 6,300 roubles per tonne across the country, or about 8 percent. A decrease was recorded in 81 regions of the Russian Federation. The cost of fuel for agricultural producers is under special control.
The Ministry of Agriculture, and the regions and the Federal Antimonopoly Service, were instructed to monitor any markup for farmers purchasing diesel fuel, including monitoring price reductions when purchasing fuel from intermediaries.
In addition, the Federal Antimonopoly Service carried out several inspections of the activities of oil companies and independent petrol stations. As a result, several antimonopoly cases were initiated against independent gas station owners on grounds of price gouging.
Thus, the short-term measures worked out, but to maintain stability in the domestic market, the Government adopted a number of additional systemic measures last Friday, which had been worked out with the industry and with the experts.
It was decided to amend the Tax Code and restore the fuel damper from 1 October. Changing the damper coefficient to 1.0 will increase the amount of compensation to oil refineries when selling motor fuel in the domestic market. This will provide economic incentives to saturate the domestic market with fuel and, as a result, will help maintain a stable price situation on the exchange and in retail.
Second, in order to increase the liquidity of exchange trading and increase transparency, the Government resolved to cancel the second trading session at the exchange and to increase the minimum standards for the sale of motor fuel in exchange trading of up to 15 percent for petrol and up to 12.5 percent for diesel fuel.
The main goal of this resolution is to prevent a decrease in the supply level reached at the exchange, as well as increase the liquidity of exchange trading during the main trading session, which will in turn help increase the transparency of trading and equalise the availability of exchange goods for all consumers.
The third measure involves lifting the ban on exporting diesel fuel that is piped to seaports.
As I mentioned earlier, this restriction has served its purpose. The resolution was made to prevent excessive storage and a subsequent decrease in production at major refineries that produce Environmental Class 5 diesel fuel and ensure proper domestic market supply.
Simultaneously, to ensure supplies to the domestic market, at least half of the produced diesel fuel must go to the domestic market which will sustain the operational capacity of refineries that are too big to fail and motivate companies with a history of higher export shares to supply the domestic market with the motor fuels.
The ban on exporting automotive gasoline and diesel fuel via rail remains in effect to keep domestic market supply uninterrupted and to prevent wholesale price hikes.
The fourth Government resolution aims to put an end to exporting refined products that are intended for the domestic market, also known as gray exports. A safeguard tariff of 50,000 roubles per tonne is levied on all types of petroleum products not limited to automotive petrol and diesel fuel for exporters who aren't petroleum product manufacturers. This measure will be fully implemented after the export restrictions have been removed completely.
This safeguard tariff will not impact reputable manufacturers, particularly large refineries with a capacity of over 1 million tonnes annually.
These measures will prevent resellers from pre-purchasing fuel for further export once the restrictions are lifted. This will also effectively prohibit the export of fuel under the guise of other refined products.
Mr Mishustin, I would like to thank you for supporting these resolutions. They are truly vital for the industry and for consumers. The Government will continue to closely monitor the domestic fuel market on a daily basis and interact with the companies to ensure domestic market stability.
Mikhail Mishustin: Thank you, Mr Novak. It is critical for you and the Ministry of Energy to keep an eye on the situation, particularly in matters of pricing. Clearly, we should stick to our priority objective which is to meet the needs of Russian consumers. The extent to which our domestic market is saturated with fairly priced goods should be the starting point for all subsequent actions.
On to the next item on our agenda, colleagues. The Government continues to act on the President's instructions concerning the development of high-tech sectors that are critical to our economy’s stability.
This year, we will set aside about 4 billion roubles in additional funding to promote top priority research and development projects. Of this amount, over 2 billion roubles will be directed towards research in the space industry. Businesses increasingly participate in these efforts which primarily focus on creating high-resolution Earth remote sensing satellites. We thoroughly discussed these matters during a dedicated strategic session. One of our primary goals is to significantly expand our orbital group.
Another portion of these funds, nearly 1.7 billion roubles, will be earmarked for the development of energy storage technology. These funds are indispensable for establishing the production of battery cells and materials for advanced batteries which can be used across a wide variety of industries and in people's lives.
Subsidies for the implementation of innovation-driven projects will be provided through the Ministry of Science and Higher Education and the National Technology Initiative Fund. These subsidies will be contingent on mandatory co-financing by private investors.
In light of the restrictions, it is imperative to swiftly develop domestic high-tech solutions. Involving our businesspeople in these endeavours is equally important.
Artificial intelligence is another area of Government focus. The President noted that Russia's place in the world and its sovereignty, security, and prosperity depend on our achievements in this sphere. It will enable us to address economic, industrial, and social development challenges at a higher level, and to create conditions for individual self-fulfilment and for fostering public initiatives.
This year, we will allocate almost 1.2 billion roubles in additional funds to support this industry. The bulk of these funds, approximately 800 million roubles, will be used to issue grants to small businesses that develop AI-based products and services.
These companies will use these funds to implement their solutions. This year, at least 16 companies will benefit from this support.
A quarter of a billion roubles will be allotted to creating and updating datasets from public systems that enjoy high demand in business transactions as well as the infrastructure for accessing these datasets. Such datasets have the potential to be used as the basis for machine learning in critical sectors of the economy and to facilitate their digital transformation. These organisations must have reliable access to high-quality and accessible data.
Funding the second wave of AI-related research centres is also included in our plans.
All of that creates additional prospects for launching innovative and promising domestic solutions in this critical sector. This is particularly important in the face of external pressures and for achieving technological independence.
Colleagues, I urge you to closely monitor the progress of the development of the high-tech sectors that I mentioned within the areas under your purview. Please keep these matters under your personal control.
