Regulated price rise gains momentum

On April 10, petrol prices were raised by 5%. Transport, housing and communal services, meat and dairy industry encountered high losses, leaving the authorities with no other options, but to increase prices.

Belneftekhim Concern on April 10, 2012 increased petrol and diesel fuel retail prices by 5.5% on average. On April 11, one liter of petrol Normal-80 was Br 6050 (price increased by 6.1%), AI-92 – Br 6300 (5.0%), AI-95 – Br 6800 (5.4%), diesel fuel – Br 6950 (5.3%).

It has been less than a month since the last time petroleum price hike: on March 14, prices were increased by 5.0%.

Current petroleum price rise is not the first or the last this year, the prices are still lower than in Russia by 15 – 18% on average. In addition, transport, housing and communal services, meat and dairy industry encountered high losses, leaving the authorities with no other options, but to increase prices. This boosts the inflation and decreases real incomes, being at variance with the objectives set by the government. The average salary in January-February 2012 amounted to Br 2,921.3 thousand (USD 350.3). In real terms (adjusted for inflation) in January-February 2012 the average salary has decreased in comparison with January-February 2011 by 1.5%. In nominal terms, average wages increased by 105.3%, .i.e. more than twice. The National Statistics Committee reported that real personal incomes in January-February 2012 decreased by 2.4% in comparison with January-February 2011. According to the forecast, the nominal average monthly wage in the country in 2012 will be Br 3.216 – 3.227 million, including Br 4.05-4.063 million in December 2012 (64.5-65% increase).

The authorities found themselves in a vicious circle with no easy way out: they need to raise prices, which would reduce real incomes.

The vast majority of the population, affected by the devaluation in 2011 is greatly concerned about the growth of nominal and real wages. Even Lukashenko acknowledged it, “I have noticed that recently employees and labor collectives are raising the issue of wages more often”. However, if previously Lukashenko easily promised wage increases and salaries of USD 500 by the year-end, now he is more careful in his assessments, “If production and sales grow, please, raise salaries and pay. No performance, no salary: otherwise, we the financial and economic crisis that we went through will repeat”. The authorities found themselves in a vicious circle with no easy way out: they need to raise prices, which would reduce real incomes. During the election year interests of the population were in the forefront, now the accents have shifted in favour of the real sector.