The Federal Anti-Monopoly Service (FAS) might initiate an investigation into the recent kerosene price increase, according to Igor Artemiev, the Head of the regulator, Vedomosti reports.
The tax manoeuvre has set the export duty for kerosene at 48% of oil export duty in 2015, from 65% in 2014. As a result of the change in both the policy and the macro environment, the kerosene domestic market premium has decreased from USD 54/t in 4Q14 to USD -96/t in 1Q15, for the central region, we calculate. As we have noted before, were the internal market premium for oil products to move into negative territory, it could make exports a more attractive alternative, unless domestic retail and wholesale prices for fuel rise.
Given that the FAS has yet to make a final decision, we do not expect any market reaction to the news.
On 13 April, the Russian Air Transport Association sent a request to the FAS to investigate the recent kerosene price rise at airports.