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12 Jun, 2008 13:31

Can anything stop petrol price surge?

The price of petrol in Russia may reach $US 1.20 per litre by the end of the summer, which would be an increase of 50% since the beginning of the year. So far, Russia has escaped the fuel protests seen in other countries.

In Europe the price at the pump equates to nearly $US 2.50 per litre, while in Russia it’s just gone through the $US 1 barrier. However, oil traders know there is still room for an increase.

Gazprom CEO Aleksey Miller said the price of crude oil may hit $US 250 a barrel in the foreseeable future. Analysts claim even if it does, petrol prices won’t double in line with the oil price, as the price of fuel does not directly depend on crude.

The price of petrol includes oil taxes, which are dependent on the global oil price.

The KORTES Centre is an independent information and research entity which provides services to companies operating in the Russian oil market. Pavel Strokov its Development Director said:

“We have our own market, our own demand. We have to try to detach prices for domestic oil and oil products from global prices. That’s why the St. Petersburg oil exchange was created. It will trade kerosene, fuel oil and petrol and we’ll finally discover what our real domestic price for oil products is.”

Some experts believe that could even increase the price of fuel.

So far, Russia has seen only a handful of muted protests and nothing to match the scenes in European countries.