Higher export prices drive up industrial producer prices in Russia

The rise in producer prices for supplies to domestic customers has accelerated this year, exceeding 14 % y-o-y in September. Extractive industries (includes oil & gas) have seen prices for their products score 30−40 % y-o-y in recent months.

As in the two previous years, the price of crude oil supplied to domestic users has risen sharply with the export price. However, domestic prices of crude oil stay quite a bit lower due to export tariffs. In recent years, the domestic tax-free producer price has been about two-thirds of the export price.

The domestic oil price and export prices for refined oil products have caused prices of oil products to rise inside Russia. Oil and oil products represent about a quarter in the domestic industrial producer price index. Hikes in gasoline prices in the distribution chain last spring were quick, inducing the government to reduce the excise tax on gasoline until the end of this year.

Rise in industrial producer prices for domestic supplies

Source: Rosstat.

Domestic producer prices have also risen along with export prices in the chemical, metal and forest industries. In these branches, domestic prices have been up in recent months by around 10−15 % from a year ago.