Why do gasoline prices go down in USA and go up in Russia?

In early 2013 US started reducing gasoline price. American people thought that this is temporary, while the oil industry experts insisted on the opposite. And they were right, writes Noviye Izvestiya.

During last year the gasoline prices continued going down and they continue dropping slowly this year as well. During over a year they went down by $1.50 per gallon. According to the Lundberg Survey audit organization, now average price of gasoline in the US is $3.40 per gallon or $0.90 per liter. In other words, the car owners save minimum $100 a month on gasoline.

At the same time during last year and early this year fuel production kept growing in the US. According to the US Transport Department, the US has almost the same number of cars as number of its people or over $300 million. Since early 2013 gasoline production increased by 5.4% and now it reached 9.7 million barrels a day. Increase in the fuel resources for the petrol stations forced the market to reduce its price day after day.

Last year the US Energy Department summarized results of oil production in the country during last year. The US oil industry has broken the record of oil production – 9.2 million barrels of oil a day. 

The drilling companies from Texas, Utah, Alaska and Colorado should be praised. But this is mainly achievement of the drilling companies from North Dakota. For the first they could take advantage of huge resources of the state, which were inaccessible for the oilmen for centuries.

Gasoline prices go up in Russia, despite growth of oil production. In early January 2014 Russian Minister of Energy Alexander Novak said that Russia hit the record of oil production in 2013 – 523 million tons. The Russian oil industry did not have such showings since the 1990s. But despite the oilmen’s efforts, in 2013 gasoline price in Russia increased by 5.7%, according to the latest information of the Russian Statistical Committee. 

According to the market participants, in 2014 growth of gasoline prices will constitute about 10%. The government reaps the fruits of artificial containment of gasoline prices and use of non-market methods for the market regulation to the detriment of development of competitiveness of the field.—0—