Oil suppliers are running out of fuel reserves after the increase in fuel tax. As of Sunday, major petroleum dealers, such as Shunkhlai and Petrojump, have ran out of A92 petrol, while Sod Mongol is only distributing to people with an IC card. Shunkhlai LLC informed that the company sold over 20 tons of A92 petrol on Saturday.
The price of A92 petrol remains unchanged at MNT 1630 per liter and the related ministry informed that the national fuel reserve can cover 41 days of average consumption; however, petroleum dealers imposed that the fuel price needs to increase by MNT 250-300 per liter. Accordingly, the private entities have reported to the related ministry that fuel distributors are running on a deficit, but no settlement has been reached yet.
Economist Batpurev Ayushsuren commented “The oil price rallied in the global market and the Government has raised excise tax on fuel, which is forcing the oil importers to increase fuel price.”
Mongolia has been stabilizing fuel price with four tax policies, namely excise tax on fuel, tax on petroleum and diesel fuel, customs duty and VAT, and maintained price fluctuation under MNT 100. For instance, the Government has collected high amount of revenue to the State Budget by increasing import duty on petroleum when oil price dropped in 2016. As a result, a total of MNT 156 billion has been collected from fuel tax last year.
Specifically, the excise tax of up to 90 octane imported through Altanbulag port has been increased to MNT 160 thousand from MNT 50 thousand per ton. As for Diesel fuel, the excise tax increased by 2-3 times, to MNT 180 thousand per ton. Later in December, the price of up to 90 octane has further increased to MNT 190 thousand.
As a result, the fuel price jumped by 4-7 times last year. The price of up to 90 octane fuel increased by around MNT 130 thousand per ton in July 2017. This year, the Government estimated to collect MNT 295.4 billion from excise tax on fuel.
Additionally, the OPEC members have agreed to reduce oil output by 1.8 million barrels per day since November 2016. As of last Friday, Brent crude price reached USD 69.8 per barrel at the London Metal Exchange, increasing 20-25 percent compared to the same period of last year. The fuel import price has been constantly increasing since November 2017 and is showing an impact in the commodity market.
Tugsbilig.B
Oil suppliers are running out of fuel reserves after the increase in fuel tax. As of Sunday, major petroleum dealers, such as Shunkhlai and Petrojump, have ran out of A92 petrol, while Sod Mongol is only distributing to people with an IC card. Shunkhlai LLC informed that the company sold over 20 tons of A92 petrol on Saturday.
The price of A92 petrol remains unchanged at MNT 1630 per liter and the related ministry informed that the national fuel reserve can cover 41 days of average consumption; however, petroleum dealers imposed that the fuel price needs to increase by MNT 250-300 per liter. Accordingly, the private entities have reported to the related ministry that fuel distributors are running on a deficit, but no settlement has been reached yet.
Economist Batpurev Ayushsuren commented “The oil price rallied in the global market and the Government has raised excise tax on fuel, which is forcing the oil importers to increase fuel price.”
Mongolia has been stabilizing fuel price with four tax policies, namely excise tax on fuel, tax on petroleum and diesel fuel, customs duty and VAT, and maintained price fluctuation under MNT 100. For instance, the Government has collected high amount of revenue to the State Budget by increasing import duty on petroleum when oil price dropped in 2016. As a result, a total of MNT 156 billion has been collected from fuel tax last year.
Specifically, the excise tax of up to 90 octane imported through Altanbulag port has been increased to MNT 160 thousand from MNT 50 thousand per ton. As for Diesel fuel, the excise tax increased by 2-3 times, to MNT 180 thousand per ton. Later in December, the price of up to 90 octane has further increased to MNT 190 thousand.
As a result, the fuel price jumped by 4-7 times last year. The price of up to 90 octane fuel increased by around MNT 130 thousand per ton in July 2017. This year, the Government estimated to collect MNT 295.4 billion from excise tax on fuel.
Additionally, the OPEC members have agreed to reduce oil output by 1.8 million barrels per day since November 2016. As of last Friday, Brent crude price reached USD 69.8 per barrel at the London Metal Exchange, increasing 20-25 percent compared to the same period of last year. The fuel import price has been constantly increasing since November 2017 and is showing an impact in the commodity market.
Tugsbilig.B