The discussion covered current issues, in particular the effect of the situation in the fuel market on various branches of the Russian economy, the start of the summer tourist season, children’s summer recreation and spring flood relief.
Minister of Healthcare Veronika Skvortsova made the keynote speech on the availability and quality of medicines following the introduction of data analysis systems.
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President of Russia Vladimir Putin: Good afternoon, colleagues.
Everyone is busy watching football, and taking pleasure in the performance of our athletes, football players. We wish them success in the remaining matches.
However, life goes on as usual. The working issues that face the Government have not gone anywhere. Therefore, today we will talk about the affordability and quality of medicines now that information and analytical systems have been introduced in this sphere.
Before we begin, let us review a few current issues, primarily, of course, the situation in the fuel and lubricant market.
Mr Artemyev, you have the floor.
Head of the Federal Antimonopoly Service Igor Artemyev: Mr President, colleagues,
Recently, we have seen stable retail and wholesale prices, as well as declining stock index prices, which means that the stabilisation is becoming more solid. It is safe to say that in the short term these prices will increase within the confines of existing and growing inflation.
We believe that these, as well as future measures, and future prices are closely tied to the tax reform, which is a subject of a separate current discussion in the Government and at your level, Mr President. However, our goals in the negotiations with the oil companies in the wholesale sector have been achieved.
We noted a slight increase in prices of individual petroleum products by a fraction of a percentage point, which reflects the independent gas stations’ bid to improve their margins. We have responded to this. For example, we initiated a case in Crimea to curb attempts to charge monopolistically high prices, and we will see it to completion. We have issued warnings to eight oil companies. In other words, if someone is trying to act outside the law, we intervene and stop it.
In the end, to date, the Government’s goals and, accordingly, the timely reduction of excise taxes have led to the results that the people and the Government were looking for. The tax reform and subsequent actions depend on it.
Vladimir Putin: Mr Kozak, are you aware of the proposals to make all oil-producing companies with a production license send certain amounts of oil to the refineries with subsequent mandatory sale on the domestic market? Have you heard such proposals?
Deputy Prime Minister Dmitry Kozak: Yes, we have and we agreed on it in principle. The volume of exchange trade and fuel supplies to the domestic market have increased significantly. As of two days ago, deliveries to the exchange increased by 45%, and the volume of exchange trade can be increased accordingly. This will also help stabilise prices.
This is not the issue. The oil companies are meeting their obligations. We agreed – I literally discussed this issue with you in a live broadcast – that if the agreements are not implemented, and if high oil prices on the global markets exert even more pressure… Even today, the oil industry loses one billion rubles every day in revenue from selling fuel and lubricants on the domestic market at our target price of 40 rubles per litre.
Vladimir Putin: They are not losing anything, this is just a shortfall in revenue.
Dmitry Kozak: Not losing, right, but this represents a loss of profit. In this economic situation, it is also very difficult to ask businesses to be altruistic, so we agreed that in case of a large disparity, we will offset it by temporarily increasing the oil export duty during periods of high prices.
Vladimir Putin: That is clear, we discussed it. I am talking about something else now. Some have come up with a different mechanism, which is to make all those with licenses ship a portion of their oil (they even specified the number – 17.5 percent) to the refineries with an obligation to sell the products later on the domestic market. Did you have a chance to discuss this with them?
Dmitry Kozak: We did. We have an agreement, and they comply with it. We can develop a binding legislative norm.
Vladimir Putin: But so far, there has been no need to?
Dmitry Kozak: Correct, there is no such norm.
Vladimir Putin: Good.
Mr Patrushev, what about the prices of fuel and lubricants in agriculture?
Minister of Agriculture Dmitry Patrushev: Mr President, one of the factors that influenced the preparation and implementation of the spring sowing campaign, was indeed the increase in the fuel and lubricant prices. Diesel fuel cost about 52,500 rubles per tonne on June 14. The rising prices of fuels and lubricants are also a risk for the preparation and timely conduct of harvesting and other autumn work, when agricultural producers’ spending on these usually doubles compared to the sowing campaign.
Thus, while during the sowing campaign, farms consumed 1.7 million tonnes of fuel and lubricants, the projected volume for harvesting and autumn fieldwork is 3.7 million tonnes. Since petroleum products account for about 10 percent of the total cost of production in agriculture, the price increase that occurred this year will entail a number of additional costs for agricultural producers, which may affect the price of their end produce.
In this regard, we propose working out a set of measures that will compensate agricultural producers for the losses they incurred as a result of the increase.
Vladimir Putin: What kind of measures? Are you going to discuss this at the Government meeting?
Dmitry Patrushev: Yes, we are going to discuss this.
Prime Minister Dmitry Medvedev: We will hold a special meeting, Mr President, to discuss this issue.
Vladimir Putin: Fine.
Mr Ditrikh, what about airfare now that fuel prices are up? The high tourist season is already here.
Minister of Transport Yevgeny Ditrikh: Yes, there are a number of issues. With your permission, I will provide a brief overview. Overall, air transport this year is expanding, with our citizens traveling both across the country and internationally. In some cases, we do not even have enough time to respond to all requests.
In 2017, 62.5 million passengers were transported. That is 18.5 percent more than in the previous period. This year, we have already achieved 12.5 percent growth in five months compared to the previous year. The growth continues.
We try to build on our transport capacity. We increased capacity on the main routes by 4 percent this year as compared to 2017: by 9 percent on international routes and by 7 percent on regional routes. We try to respond in a targeted way to the transport issues arising now.
I want to report that in the Far East, such questions are raised by the governors. Nordwind Airlines made available an additional two flights a week to Magadan beginning July 4. Yesterday, it also launched a direct regular Khabarovsk-Simferopol flight on a wide-body aircraft. Rossiya, Ural and Aeroflot airlines have joined this work. We are implementing two programmes to support domestic air transportation, including regional ones, and including air service to Crimea or central Russia.
With regard to airfare, of course, changes in prices of fuel, lubricants and jet fuel affect the industry. The Government is looking into this issue carefully. Prices have been stabilised currently.
In order to preclude ticket shortages and to stabilise prices, we are considering a number of support mechanisms. In particular, in conjunction with the Minister for the Far East, proposals have been made to expand subsidies for air service to the Far East. We will soon submit these proposals to the Government.
Vladimir Putin: The average tourist package price to travel in Russia is half as much as going abroad. It is 41,000 rubles for Russia while it is 82,000 to go abroad. How has this holiday season begun?
Head of the Federal Agency for Tourism Oleg Safonov: Mr President, colleagues,
The summer tourist season in the Russian Federation has begun successfully. Holidays have become more popular with Russians now. The total volume of air tickets sold for June to August has grown by 9 percent compared to last year, and by 18 percent on domestic flights.
Those who go abroad are safely protected. The total volume of reserve funds and personal liability in the framework of the Association of Outbound Tourism is over one billion roubles; in addition, tourist agencies have insurance worth more than 22 billion roubles. This is the highest level of financial guarantees provided for tourists in the history of Russian outbound tourism. Russians are provided with attractive tour options in Russia. Domestic trips account for over a half of all the tickets sold.
This season we are seeing an increased interest in family holidays: over 52 percent of purchases. Package tours across the Russian Federation are also popular. This competitive product includes accommodation, flights, meals and tours and allows savings of up to 30 percent compared with individual tours.
The geography of domestic trips is getting wider. This year, tours to Kamchatka, Sakhalin and the Kuril Islands are being sold.
As you mentioned, Mr President, the average trip in Russia costs half as much as going abroad: 41,000 rubles compared with the 82,000 needed to travel abroad. Anapa and Crimea are the most available seaside resorts this June: a weeklong holiday for two including a return flight from Moscow will cost about 20,000–22,000 roubles and 28,000 to Sochi. Prices are quite reasonable.
Crimea is becoming the most popular Russian resort area. As of June 1, over 1.5 million people have visited it since the beginning of this year, 26.5 percent more than last year.
Tourist numbers this year are expected to grow by 20 percent to over 6.5 million people due to the opening of the Crimean Bridge and the new air terminal in Simferopol. The number of beaches for the high season has increased to 431 which is 44 more than last year, 81 hotels and spas have been up