In relations to the fuel shortage, the representatives of some oil dealers, namely Petrovis Oil LLC and NIC LLC have held a press conference on gasoline price. Batpurev Ayushsuren, Head of Marketing Department of Petrovis Oil LLC, highlighted that around 76 percent of gasoline price amounts to the import expense, while 23 percent is spent on tax. Oil dealers are managing both operational expense and revenue from the remaining 1 percent.
“The reason gasoline price did not change when oil price dropped in the global market in 2015 was the Government’s regulations on increasing excise tax on fuel. The key factors of fuel price are the excise tax on petroleum, global oil price and USD/ MNT rate. The Government has been increasing budget revenue with the price drop; however, oil price has been increasing since 2017, as well as the excise tax. Accordingly, fuel suppliers have run out of reserves due to sudden demand,” addressed Mr. Batpurev Ayushsuren.
Naranbat Nanzad, Executive Director at NIC LLC, said “Excise tax on petroleum increased to MNT 180- 290 thousand per ton. Oil price stands at USD 70 per barrel in the global market. Therefore, oil dealers are operating on deficit. Unfortunately, the issue has lingered this long because the Price Council has not convened for 12 months. We sent an official letter to the council, stating the current situations. The council reply was to stay on deficit until December 2017 and was supposed to convene around that time; however, members’ attendance was not enough. Although the council held a meeting on January 9, stakeholders did not reach any settlement and decided to establish a working group to study the deficits of oil dealers. Presently, A95 and A98 petrol prices increased by around MNT 110-150. However, this increase is not sufficient to cover the deficit. Prices of A92 and A80 have not changed.”
He added “We are talking about MNT 250-350 deficit per liter depending on the octane. The deficit will be widened further. Since the filling stations are overloaded, the fuel reserve will run out fast. We need to earn profit in order to import. There is a concern of shortage.”
Tugsbilig.B
In relations to the fuel shortage, the representatives of some oil dealers, namely Petrovis Oil LLC and NIC LLC have held a press conference on gasoline price. Batpurev Ayushsuren, Head of Marketing Department of Petrovis Oil LLC, highlighted that around 76 percent of gasoline price amounts to the import expense, while 23 percent is spent on tax. Oil dealers are managing both operational expense and revenue from the remaining 1 percent.
“The reason gasoline price did not change when oil price dropped in the global market in 2015 was the Government’s regulations on increasing excise tax on fuel. The key factors of fuel price are the excise tax on petroleum, global oil price and USD/ MNT rate. The Government has been increasing budget revenue with the price drop; however, oil price has been increasing since 2017, as well as the excise tax. Accordingly, fuel suppliers have run out of reserves due to sudden demand,” addressed Mr. Batpurev Ayushsuren.
Naranbat Nanzad, Executive Director at NIC LLC, said “Excise tax on petroleum increased to MNT 180- 290 thousand per ton. Oil price stands at USD 70 per barrel in the global market. Therefore, oil dealers are operating on deficit. Unfortunately, the issue has lingered this long because the Price Council has not convened for 12 months. We sent an official letter to the council, stating the current situations. The council reply was to stay on deficit until December 2017 and was supposed to convene around that time; however, members’ attendance was not enough. Although the council held a meeting on January 9, stakeholders did not reach any settlement and decided to establish a working group to study the deficits of oil dealers. Presently, A95 and A98 petrol prices increased by around MNT 110-150. However, this increase is not sufficient to cover the deficit. Prices of A92 and A80 have not changed.”
He added “We are talking about MNT 250-350 deficit per liter depending on the octane. The deficit will be widened further. Since the filling stations are overloaded, the fuel reserve will run out fast. We need to earn profit in order to import. There is a concern of shortage.”
Tugsbilig.B