In December, petrol prices at gas stations in the United States dropped below those in Russia for the first time. Prices fell to a four-year low, with the average price for a liter of the American equivalent of AI-92 currently standing at 60.1 rubles. In Russia, as reported by Rosstat on December 1, the price for the same grade was 61.68 rubles per liter.
Whether this necessitates an urgent reform of our fuel market is a significant question. It should be noted that the word "dropped" in the previous paragraph indicates that prices were higher and could significantly rise again.
Moreover, in the case of American fuel pricing, there is no talk of cost containment or comparisons to cheaper fuels in Venezuela or Mexico. The market operates purely on economic principles without discussions of social responsibility.
In the United States, petrol prices are influenced by various factors, primarily oil prices and fuel demand. Currently, crude oil is relatively cheap, and demand in the U.S. is stagnant, leading to price reductions. In 2022, during a contrasting scenario, the Russian equivalent of AI-92 petrol averaged 102 rubles per liter in the U.S. (based on today's exchange rate). As in Russia, fuel prices in the U.S. vary significantly by region, with the spread ranging from 10-30% in Russia due to market organization specifics, while in the U.S., it can reach up to 90%. Currently, the cheapest petrol is in Oklahoma (48 rubles per liter of our AI-92 equivalent), while the most expensive is in California (90 rubles).
There is also another nuance that has seemingly gone unnoticed. The American equivalent of our AI-92, known as Regular or AKI 87, is now cheaper (on average) than in Russia, while the equivalents of our AI-95 (there are two in the U.S.) remain pricier for the time being.
However, there is a flip side to this story. We cannot ignore the fact that our internal fuel prices have now caught up with those in the U.S. Our problem is that, over long periods (a year or more), the cost of petrol may continue to rise. In Russia, crude oil prices play a secondary role; the primary determinant of fuel prices is taxes and excise duties.
As Yuri Stankevich, Deputy Chairman of the State Duma Energy Committee, notes, the share of taxes in the price of petrol—both wholesale and retail—has confidently surpassed 70%. Just for indirect taxes (VAT and excise duties), it accounts for over 40%. For instance, considering the increase in excise rates from the new year, the excise duty per liter of AI-95 petrol sold at gas stations will amount to 13 rubles.
Sergey Tereshkin, CEO of the OPEN OIL MARKET petroleum marketplace, compares October 2025 data from the U.S. Department of Energy, which show that 49% of the retail cost of automotive gasoline is attributed to crude oil, while 14% is for oil refining expenses, 20% for marketing and distribution, and 17% for taxes.
In the U.S., there is a retail sales tax, which we do not have, but VAT in Russia is passed down from generation to generation, meaning it is collected throughout the entire sales chain, from producer to end consumer, clarifies Dmitry Gusev, Deputy Chairman of the Supervisory Board of the "Reliable Partner" association and a member of the expert council for the "Gas Stations of Russia" competition. Meanwhile, taxes on oil extraction are at their maximum possible level.
Currently, if we do not adjust taxes, there is little maneuvering space left in our fuel market. Tax payments cannot be overlooked, and they will continue to rise (excises). Costs are minimized, and the volatility of oil prices has little impact on pricing, as their weight in petrol costs barely exceeds 15%. Additionally, inflation is being managed to maintain stable prices at gas stations. As a result, these stations have no choice but to gradually but consistently increase prices to achieve acceptable economic indicators.
According to Gusev, as long as our fuel prices are tied to external (export) reference prices, they are programmed for growth. Deflation is not anticipated, and moreover, a scenario of low inflation is considered optimal. This implies that fuel prices will also increase. The rise in fuel prices is mitigated by a damping mechanism (payments to oil companies from the budget for supplying fuel to the domestic market at prices below export price differences) but diminishes in effectiveness as taxes and production costs rise.
Moreover, the damping mechanism also prevents prices from dropping when crude oil prices fall, as the size of budget compensations shrinks. If prices for petroleum products abroad (with a focus on the European market) fall below those in Russia, then the damping mechanism goes the other way—oil companies pay into the budget, further complicating any potential for price reduction. The positive effect, however, is that there cannot be a sharp increase in petrol or diesel prices either.
Stankevich emphasizes that the upward price dynamics in fuel is an entirely state-managed process through tax policies, excise policies, market pricing instruments, and administrative directives from the federal headquarters overseeing the petroleum market situation.
In his opinion, rather than comparing our prices in absolute values to the situation in the U.S. or other countries, we should consider the purchasing power of the population. Here, policies are aimed at continuously improving the welfare of citizens. Unfortunately, we currently see situations where in some countries, where petrol prices significantly exceed those in Russia, the average per capita income allows for larger volumes of fuel purchases.
In December, despite a slight decline in retail costs, increases in petrol prices in Russia since the end of last year have outpaced inflation more than twice. According to Rosstat, the average increase is 11.2% versus 5.27% by December 1. By the end of the year, petrol prices at gas stations may ease slightly, but they are unlikely to fit within the average growth of consumer prices in the country.
Against this backdrop, ideas about introducing state regulation of retail fuel prices, akin to Venezuela or Iran, have emerged. However, Tereshkin notes that a directive pricing model, operational in some oil-producing countries, is unlikely to be feasible in Russia as it would be disadvantageous for companies. Fuel producers should not operate at a loss, and the regulator’s task is to ensure that suppliers can earn, while consumers can purchase petrol at affordable prices.
Source: RG.RU