Expert: 60-66-90 system reflects the absence of a long-term development strategy in the sector

The “60-66-90” system, that has been applied for about 1.5 years already, fully reflects the fact of the absence of the long-term development strategy in the sector, G. Vygon, director of the Energy center of the business –school “Skolkovo” writes.

The results of the regime are clear: the primary processing volume increases and the budget loses about $20 bln a year. Speaking about the investment into the processing, the Government’s position is doubtful. On the one hand, the increased duty for fuel oil stimulates the investment into the processing deepening (advantage), on the other hand, the expectations of the long-term high processing margin (by means of subsidies) evoke to invest into the construction of oil refinery plants. The increase of volumes and processing depth in conformity with the obligatory modernization programs will lead to the surplus of low-sulfur diesel fuel which will be difficult to sell in the foreign markets. The keeping of higher prices for fuel doesn’t stimulate its production and many companies turn away from the plans on the construction of catalyst cracking units. As a result the problem of its deficit at the season of the highest demand won’t be settled, and the premium to the export parity will be saved in the domestic market.