Fuel prices in Russia continue to climb, outpacing inflation, due to a complex interplay of factors, including taxes, excise duties, and domestic market regulations. Despite Russia being a major oil producer, motorists face increasing costs at the pump.

Over the past three years, prices for all major fuel types have risen significantly. AI-92 gasoline increased by 19.28%, AI-95 by 20.04%, AI-98 and above by 39.59%, and diesel fuel by 30.79%.

The primary driver behind these increases is the substantial tax burden imposed on fuel. Excises alone account for over 50% of the retail price. These excises, along with VAT and mineral extraction taxes, constitute approximately 70% of the price per liter, dwarfing the actual cost of oil and processing.

The situation is further complicated by Russia’s regulatory mechanisms, which aim to stabilize the income of oil companies and ensure consistent budget revenues. The government adjusts taxes based on global prices to protect the revenues.

Experts suggest potential solutions such as abolishing fuel excise taxes and allowing the addition of methanol to gasoline, a common practice in other countries. Shifting the tax burden to other sectors, like tobacco, has also been proposed.