Saturday, September 16, 2000 Moscow's Gas Prices Leap 13% Overnight-Up 25-30% in Past Month By Oksana Yablokova

Staff Writer

Many drivers pulling up to the filling pumps Friday were startled to see that city gasoline prices appeared to have followed the lead of fuel prices in the West and shot up 13 percent overnight.

The latest increase puts Moscow's gradually climbing gas prices up 25 percent to 30 percent from a month ago. Government officials reassured Muscovites that the latest jump from 7.5 rubles to 8.5 rubles for a liter of A-95 gasoline was not the sign of an emerging fuel crisis like the one seen recently in Europe.

The hike is fueled by a gas shortage due to strong seasonal demand, and prices should stabilize or drop by the end of October, Economics and Trade Minister German Gref said.

But oil analysts said that gas stations, encouraged by heady oil prices and higher inflation, are probably seeing a window of opportunity to push up prices at the pump. They said they did not expect any more dramatic increases in gas prices.

"The potential for further price increases is almost exhausted," said Steven Dashevsky, oil analyst at the Aton brokerage.

Soaring global prices on oil products have made exports from Russia more lucrative for traders and, as a result, less gasoline may be left over for Russian gas stations, he said.

Moscow has enough supplies for the time being, but the situation could get critical since demand appears to be growing, said Sergei Borisov, president of the Moscow Fuel Association, which represents gas stations in Moscow and the Moscow region. The association is measuring a 30 percent increase in demand in September, he said.

Valery, a cashier and mechanic at a gas station in northern Moscow, agreed that demand was growing and said he saw no signs of panic.

"People grumble, but you know people: If something as radical as a ruble crisis hits, then they go wild," he said. "Otherwise, they just put up with it."

Fuel and Energy Minister Alexander Gavrin met Friday with oil company officials to discuss a pricing policy. No announcements had come out of the meeting by late Friday night.

Meanwhile, drivers in Moscow and the region are complaining about the growing prices. Some gas station owners are raising prices as often as twice a day.

"Yesterday I drove by the TNK [gas] station in the morning and the 92 octane gasoline was available at 7.20 rubles per liter, while in the evening it was already 7.50 per liter," said Sergei Veretennikov.

"These prices are killing me," said Dmitry, who would not give his last name. "I think people are driving as little as possible until this passes."

http://www.moscowtimes.ru/16-Sep-2000/stories/story5.html

-- Carl Jenkins (Somewherepress@aol.com), September 16, 2000