Petrol and meat prices increased once more

Petrol and diesel fuel prices have been increased again on 20 August by 3%. Since the beginning of this year this was the sixth increase. All in all, since the beginning of the year fuel prices increased by more than 55%, which surpasses the inflation rate, currently “only” at 45.8%.

On 24 August pork selling prices have been increased by 10%. On 8 August pork prices have been increased by 5 %.

The Ministry of Economy of Belarus stopped regulating meat and meat products prices on markets and fairs. Previously the sale price of meat and meat products at markets should not exceed 10% of the purchase price.

Comment

Belarusian refineries, regardless of the full load and the ability to buy duty-free Russian crude oil, continue being unprofitable, which makes their privatization challenging. Deliveries to the oil refineries operating at the domestic market are detrimental therefore the Government will continue rising fuel prices. In case the Russian government will apply a “60-66” mode (reduction of export duties on oil and their increase on heavy oil) exports of Belarusian oil products will become completely unprofitable, requiring a significant increase in domestic fuel prices.

Food prices will continue growing, however, given the devaluation of the ruble is ahead of the growth of domestic prices, it does not compensate for losses of the suppliers to the domestic market due to the existing disparity in prices in the border areas. Therefore the Belarusian government will introduce additional administrative measures to force manufacturers to supply to the domestic market, while lifting restrictions off market prices. It implies that the government has stimulated export artificially with the devaluation and now has to fight against it.