Administrative control of prices in the automotive fuel market

The modern Russian economy is a market economy. Of course, it is arguable what kind of capitalism has been formed in Russia. But there is no doubt that most industries are determined by factors comming from a competitive market mechanism. Having replaced directive pricing by market price formation, the reform of 1992 made it possible to balance the consumer goods market and eliminate the total deficit. The disappearance of the deficit was an excellent compensation for the decline in the standard of living of the population; thus, it helped to avoid the most radical forms of social protest. Since then, Russia has gone through hard times causing various deviations from the classical model of the capitalist economy. Until recently, the country’s authorities, who were in charge of the national economic policy, adamantly refused to return to directive pricing model, believing that this step would lead to a significant reduction in economic efficiency. However, in autumn of 2018, the government agreed to the introduction of maximum prices. An extensive industry, commonly referred to as “socially significant”, has seen those regulations. It is the market of automotive fuel. This decision means that in the near future we will witness quite a rare economic experiment of the present time. It will allow researchers to test the universality of economic laws, as well as to examine the specific modes and mechanisms by means of which these laws influences our life.