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- Support in moderation: Cabinet of Ministers is working on fuel benefits for large families
Support in moderation: Cabinet of Ministers is working on fuel benefits for large families
Russia may introduce special fuel cards for large families. The Cabinet of Ministers is working with oil companies on a mechanism for providing them, and it is being discussed whether these will be discounts or limits on receiving a certain amount of fuel for free, Izvestia learned. The oil companies are ready to provide benefits, but they note that there will be financial costs, the source of which is not clear. They are also concerned about the possibility of unfair use of preferences. Currently, there are 2.9 million large families in Russia. Details of the initiative can be found in the Izvestia article.
Fuel benefits for families with many children
Preferential fuel cards for large families may appear in Russia. Deputy Prime Minister Alexander Novak instructed the Ministry of Energy and relevant companies to work on this issue in October this year after an appeal from the Presidential Commissioner for Children's Rights. This is stated in a letter from Pavel Sorokin, First Deputy head of the Ministry of Energy, to the government staff. Izvestia has reviewed the document.
According to the Ministry of Energy, oil and gas companies with gas station networks in their structure agree with "the importance of initiatives for social support of large families" and for the most part are ready to work on this issue. However, information was received from a number of companies "about the difficulty of administering fuel loyalty cards as targeted support for certain groups of the population, as well as concerns about the risks of unfair use of the discounts provided."
If companies introduce such a loyalty program, they will have to hire additional staff to work with large families, and current budgets will need to be reviewed and adjusted, the letter says. "The financial costs of providing discounts to a certain number of consumers are also projected, the source of which is unclear," the document says.
According to the Ministry of Labor, there are 2.86 million large families in Russia today. The ministry is ready to consider the issue of providing benefits to large families in the form of fuel cards, according to the ministry's response to a request from the Ministry of Energy.
At the same time, according to information from most oil companies, their gas station networks are currently implementing loyalty programs that are available to all consumers and provided on equal terms, including to large families, according to a letter from the deputy head of the Ministry of Energy to the Cabinet of Ministers.
In total, there are about 53 million passenger cars in the country.
What do oil companies think about benefits?
In their responses to the Ministry of Energy's request (available to Izvestia), oil companies asked regulators to specify the task, answer a number of questions, and take into account the nuances of benefit administration.
In particular, Lukoil stressed in its letter that it "shares the position of government authorities regarding the expansion of support measures for large families." But at the same time, in order to implement these targeted support measures, "an official mechanism for identifying citizens belonging to the category of large families is required." The company asked to clarify this mechanism and "the possibilities of interaction with the relevant registries."
Novatek noted that the company has already implemented the possibility of obtaining fuel discounts for large families "when contacting the company's client office and providing supporting documents."
Rosneft has a Family Team loyalty program that allows you to accumulate points for purchases of fuel and related products at gas stations. "All categories of citizens, including large families, have the opportunity to take advantage of these discounts," the company said at the request of the Ministry of Energy.
Tatneft supported the initiative, but "subject to its implementation as a single state program to support large families." "The introduction of fuel cards as an addressable social support tool will require administration in terms of identifying their holders, monitoring the intended use of cards, and accounting for the actual receipt of benefits," the company noted.
Surgutneftegaz is working on the issue, and Gazprom Neft stressed that "large families have free and equal access to the loyalty program and related benefits without restrictions and additional conditions."
Gazprom Gazonefteprodukt Holding explained that due to the absence in the approved budgets of expenditure items for the provision of fuel free of charge or with discounts on loyalty cards, there is currently no opportunity to provide the support measures specified in the request. And the adjustment of the organization's budget may take at least four to six months.
The company was asked to provide information "on the projected cost parameters of the planned support measures."
Izvestia has sent inquiries to all concerned agencies, major oil companies and the Presidential Commissioner for Children's Rights.
How will the benefits affect the performance of oil companies
Today, the largest Russian vertically integrated oil companies (Rosneft, Lukoil, Gazprom Neft, Tatneft, Surgutneftegaz), as well as a number of independent gas stations (Tracsa, Neftmagistral) issue their loyalty cards. They allow you to accumulate bonuses, which can then be used to apply for discounts (equivalent exchange for rubles) when purchasing fuel and goods in gas station stores.
Each type of card has its advantages, and the choice depends on the purpose of use and the needs of the client. In addition, there are applications from banks that offer a wide range of loyalty programs and discounts, including on fuel.
According to Yuri Stankevich, Deputy chairman of the State Duma Committee on Energy, it is estimated that 40-50 million fuel loyalty cards issued by Russian companies are currently in circulation.
— According to vertically integrated oil companies, up to 75% of the total retail fuel turnover in Russia is carried out upon presentation of loyalty cards by customers. The amount of savings for the consumer varies. So, according to Gazprom Neft, when purchasing 1 thousand liters of fuel per month, the benefit is 2 thousand rubles. That is, about 2.5–3% of the cost of fuel. Similar discounts are provided by cards of other companies," the source said.
According to Yuri Stankevich, the decision to provide additional loyalty cards to large families will not affect the economic performance of industry entities, but it may be a good image step in the context of the tasks set by the President of Russia to support the institution of the family.
Dmitry Gusev, Deputy Chairman of the Supervisory Board of the Reliable Partner Association, also positively evaluates this initiative.
— I believe that it is necessary to move away from subsidizing the entire market to targeted support for certain segments of the population, including the poor and large families. However, the question arises whether all of them can get this benefit and whether they have many cars," the expert noted.
According to him, providing large families with cars, it would be advisable to equip them with gas equipment at once, because gas—engine fuel is much cheaper than traditional gasoline and diesel.
Meanwhile, according to Ekaterina Kosareva, managing partner of VMT Consult, until the authorities specify the parameters of the benefits provided, it is difficult to talk about the financial consequences for companies. But if we are still talking about providing fuel free of charge, gasoline prices may rise or oil companies will ask the Cabinet of Ministers for something in return. And this is a more complex, debatable issue, the expert believes.
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