Domestic pump prices for AI-92 gasoline have risen by MNT 250 to 300 tugriks per liter following a renegotiation of import rates with Russian suppliers. D.Davaabayar, Head of the Petroleum Products Department at the State Oil and Gas Industry of Mongolia, addressed the price hike, attributing it directly to recent volatility in global oil markets.
Since January 2023, the Mongolian government has maintained a contract to purchase AI-92 fuel from Russia at a discounted, stabilized border price of USD 705 per ton. However, D.Davaabayar explained that this contract includes a key contingency clause: if global oil prices increase or decrease by more than 30% for three consecutive months, the border price must be renegotiated.
Following a surge in global oil prices earlier this year, driven in part by international conflicts and tensions in the Middle East, the market price exceeded USD 100. With global averages hitting USD 100 in April and USD 90 in May, the contract's renegotiation clause was triggered.
Consequently, starting this month, Russia increased the supply price to Mongolia by USD 95, bringing the new total to USD 800 per ton.
Based on current exchange rates from the Bank of Mongolia, the new import cost translates to approximately MNT 2,866,000 per ton. As a direct result of this border price adjustment, domestic enterprises have been forced to increase retail prices by MNT 250 to 300 per liter.
Domestic pump prices for AI-92 gasoline have risen by MNT 250 to 300 tugriks per liter following a renegotiation of import rates with Russian suppliers. D.Davaabayar, Head of the Petroleum Products Department at the State Oil and Gas Industry of Mongolia, addressed the price hike, attributing it directly to recent volatility in global oil markets.
Since January 2023, the Mongolian government has maintained a contract to purchase AI-92 fuel from Russia at a discounted, stabilized border price of USD 705 per ton. However, D.Davaabayar explained that this contract includes a key contingency clause: if global oil prices increase or decrease by more than 30% for three consecutive months, the border price must be renegotiated.
Following a surge in global oil prices earlier this year, driven in part by international conflicts and tensions in the Middle East, the market price exceeded USD 100. With global averages hitting USD 100 in April and USD 90 in May, the contract's renegotiation clause was triggered.
Consequently, starting this month, Russia increased the supply price to Mongolia by USD 95, bringing the new total to USD 800 per ton.
Based on current exchange rates from the Bank of Mongolia, the new import cost translates to approximately MNT 2,866,000 per ton. As a direct result of this border price adjustment, domestic enterprises have been forced to increase retail prices by MNT 250 to 300 per liter.