The World Bank has recently published another Commodity Markets Outlook, in which forecast for fuel, non-ferrous metals and other commodity prices were seriously down. Simply put, commodity is getting cheaper in global market due to the relatively high supply against the background of drop in demand.

As is known, according to its volume the commodity group “oil and oil products” –mainly represented by petrol and diesel fuel - comes second (after natural gas) in Armenia’s import. Can we expect decrease in the price of those goods in our domestic market on the assumption of the tendency of the global oil market development?

Last year the import of the mentioned goods constituted 323,2 thousand tones, 213,6 thousand (68,7%) of which went to Russia. This share of our neighbor in the import of “fuel and fuel products” increased by 38,7% last year as compared to the previous year. The customs price dropped by $25 per tone (2,5%) within the same period. The fall is not that significant in contrast to the last year’s indicators.

In the first half of the current year, the customs price of “fuel and fuel products” decreased by $299 (!) per tone (about 30%).  However, the fall in prices was inadequate in retail business. Thus, the average price of “Regular” petrol dropped only by 8,5% year on year in September, diesel fuel falling by a little less than 7,1%.

Meanwhile, the price for motor fuel keeps rising in Russia, despite the oil cheapening.  Thus, the prices for AI-95 fuel and diesel fuel have grown by 4,4% (as of October 19) over a year. There is also another factor related to the expected price rise for the importers of Russian petrol. According to the Russian media, the customs duties for the export of motor fuel may grow up to $75,7 (over 6%) since November 1.