Belneftekhim is no longer pegging fuel prices to the dollar

Amid the fall in oil prices on the world market and lower prices for petroleum products in Russia, Belneftekhim was prompted to abandon the peg of fuel prices to the dollar in Belarus. In September 2014, AI-92-K5-Euro fuel price was set at USD 1 per litre and was indexed depending on the BYR exchange rate, which lead to a decline in fuel sales by 20%. The price on the domestic market will become more flexible and fluctuations of the BYR exchange rate will not lead to higher retail prices at petrol stations. However, due to the tax manoeuvre in Russia, as of January 1^st, 2016, fuel prices might go up in Belarus. If excise tax on fuel remains unchanged, the state will boost its efforts in fighting against non-centralized fuel supply by individuals; and if oil prices continue to fall on the world market, supplies may reduce fuel prices for their distribution networks inside Belarus. Excise duty on fuel is of the main sources of budget revenues and the authorities will not agree to peg fuel prices in Belarus directly to the export prices for petroleum products.