Gasoline Prices Will Rise Threefold in Belarus, Economist Says

New fees may be introduced for motorists.

Tuesday, March 19, Lukashenka approved new excise rates on petroleum products by the end of 2019. As a result, excise rates on fuel have increased by 9-29%.

It should be noted that the authorities initially intended to reduce excise rates in order to ostensibly compensate oil refineries for losses caused by the Russian "tax maneuver", and such a reduction did occur. So why did Lukashenka change his mind? What will happen to prices at Belarusian fuel stations?

Well-known economist Leu Marholin answers questions of Charter97.org:

- It's easy. The money, which is undereceived due to Russia's unwillingness to give subsidies, is found in our purses. In Belarus, oil products take one-kopeck increase every week. It may be not so noticeable, but over time, the amount comes up.

Excise taxes will also be shifted to fuel prices. After all, our refineries are already complaining that existing retail prices are not enough to cover all the costs. Now when excise duties have been increased, refineries has only two options: either to reduce the factory price or to increase the retail price. I guess the second option is more reliable and the retail price of fuel will increase by the same 9% - 29% as excise taxes. Compatriots, my congratulations!

I'd like to stress that the excise tax is usually a luxury tax. As a rule, it may be imposed on harmful goods or on those that only rich people can afford. For example, tobacco products, precious metals products, and so on.

Excise on gasoline is basically nonsense. After all, if we talk about roads, we officially have a road tax. I think that the increase in excise taxes is totally inappropriate.

- How much do you think fuel prices can go up?

- I can predict one thing: when the excise tax increases, for example, by 20 percent - prices will rise by at least 20 percent as well. Unfortunately, I cannot specify a maximum. It can't be controlled in our non-market economy.

Lukashenka may decide to continue to hold one-kopeck gasoline price increase or he may not. But I'd like to point out that the retail price will definitely increase by the amount the excise tax is increased.

- Why did the authorities abandon their intention to reduce excise taxes in order to "compensate losses of refineries from the tax maneuver of Russia? What is the reason?

- You know, the thing is the tax maneuver hardly effect enterprises. The state loses more due to export duties. Enterprises have perfectly managed to compensate losses with the "kopeck" on Sundays.

When the state increases the excise tax, it means that the ataman runs out of money. They need to get it from somewhere. So the excise tax increase is decided to be an appropriate way.

- So one can say that the authorities want to solve their problems at the expense of drivers.

- Yes! Instead of looking for something to save money on, they're looking for a sourse to grab. I'm afraid excise taxes won't be the only decision about how to steal from people. Taxes may be raised and new fees may be introduced.

- How will Lukashenka's decree on excise taxes affect the consumer basket of Belarusians? After all, fuel is a product of daily use, and its price change is very significant for the population.

- It's, you know, like a very old Soviet joke. When the authorities raised excise taxes and, accordingly, vodka prices. A son comes to his father and says:

- Dad, vodka's gone up. Now you will drink less.

- No, son, you will eat less.

It's the same with the consumer basket. It cannot increase, because it is limited by the population's income. Accordingly, if a person cannot reduce fuel consumption, he will have to cut down on something else or park the car.

If you like this article, you can support the website Charter97.org

MULTI-CURRENCY ACCOUNT FOR ASSISTANCE:

Bank's name: Bank Millennium S.A.
Address: ul. Stanislawa Zaryna, 2A, 02-593, Warszawa
IBAN: PL 97 1160 2202 0000 0002 1671 1123
SWIFT: BIGBPLPW
Name of the account holder: Fundacja “KARTA ‘97”
Purpose/title of payment: Donation for statuary aims

You can contact us by the e-mail [email protected]