Vagit Alekperov: “In Russia only two goods cost less than in the rest of the world – oil and gas”

Channel One

Pozner: The program "Pozner" is on air. The guest of the program is the founder and president of Russia's largest private oil company “Lukoil”, Vagit Alekperov. Good afternoon, Vahid Yusupovich.

Pozner: Do you think the revenues which the state gains as a result of the work of private and state oil companies are spent appropriately?

Alekperov: The money is not mine. I don’t count other people’s money.

Pozner: So, you don’t want to know about it, do you?

Alekperov: No, I don’t count other people’s money. However, we and, I believe, our leaders remember the crisis of the 1990s, which was shocking for the whole population. And the financial cushion should be formed and kept. You and I survived the late 1990s when the country saw a huge disaster, and I don’t want a repetition of this. At the same time, in 2008 we managed to pass the period smoothly due to oil dollars.

Pozner: You are a person who is one of leaders in the financial situation of Russia. What do you think about the economic prerogatives of our state? If you ask me, I would answer I have no idea. Do you understand them?

Alekperov: What are the prerogatives for today? A person. Yes, probably this is an abstract answer. But today priority should be given to spheres where a lot of people are involved, high-professional and well-paid. Today agriculture should be modernized completely, new technologies should be launched there so that people with a good education would work there.

Pozner: I understand what we need. But how…

Alekperov: But it is what we have today. I have been to the Stavropol Territory, I have seen complexes. These are unique complexes. I haven’t seen such complexes in the U.S., even though I’ve been in many places in America and seen a lot of facilities. They are working today in Stavropol. I think it is a priority. First of all, healthcare should be a priority.

Pozner: I have no doubts that it should be.

Alekperov: But it is being provided, Vladimir Vladimirovich.

Pozner: I can’t say and my power doesn’t tell me: “This is our priority. We have this much money and as many tasks. And so we should choose where we would invest our resources. We should tell you: “This is a priority. Even though the other thing is important as well, we won’t invest in it yet because we have to solve this problem”.”

Alekperov: Vladimir Putin stated in the Duma that there are four directions. These four directions are priorities. But the most important thing, we should look at modernization of the provinces. I invite you to Western Siberia, to look at healthcare in Western Siberia. In Astrakhan you can see how new industries are being built and old ones reconstructed.

Pozner: I accept the invitation.

Alekperov: Today in Moscow we don’t feel many things which happen in the country.

Pozner: The problem which concerns the majority of our listeners, as the number of private cars grew rapidly due to improvement of living conditions. Gasoline prices. I have information from auto.mai.ru: “Gasoline prices begin to grow in Russia.” “The Russian Statistics Service has to admit: fuel prices began to grow,” Rossiskaya Gazeta reports. “According to official statistics, in the last 19 weeks fuel prices began to grow. And many experts say that it is the beginning of a long-term trend. According to predictions, this year gasoline prices will grow by 7-18%, i.e. by 5 rubles.” Can you disapprove this?

Alekperov: I would like to explain. I don’t want to talk about figures of “5 rubles” or “8 rubles”, I want to turn to other figures. Fuel prices in Russia are half the prices in neighboring states.

Pozner: But there is no oil in those states.

Alekperov: A half. Norway has a lot of oil as well. We always say that our gasoline should cost as much as in Iran. But in Iran selling gasoline is limited. The Soviet Union produced most of all oil in the world, 625 million tons. I was the deputy minister. But I couldn’t go on vacation without an extra oil can. Nobody could. Nobody could tell whether they would get gasoline in a station or not.

Pozner: I remember it quite well.

Alekperov: Yes, today we have fulfilled the main target – we fill the market with cheap fuel, half the price of neighboring countries. But our fuel is being replaced. Today no car fills up in the Baltic region – they fill up in Russia and drive through all the countries.

Pozner: But there is no oil in the Baltic region. Of course it is more expensive than here.

Alekperov: But in Norway fuel is the most expensive.

Pozner: Even though Norway has a lot of oil, it is policy. It is a certain policy.

Alekperov: Yes, and our state today solves problems of filling road funds by excise policy. You know that since January 1st fuel excises grew rapidly. Gasoline prices are less than the excise policy demands.

Pozner: What is a share in a liter of gasoline?

Alekperov: 8% is the revenue of a gasoline filling station. 53-57% is taxes. The rest is production and logistics. When we speak about a gasoline filling station, I have recently seen a diagram in a newspaper about who gains what in the business. When we speak about fuel prices, yes, they are high, but a liter of the most expensive gasoline costs less than a liter of water in any store.

Pozner: I see. I have read that production of a liter of vodka needs fewer efforts than the production of a liter of fuel, of gasoline. I understand this. But it seems that gasoline prices don’t depend on an increase or decrease of oil prices on the market. We don’t see any correlation.

Alekperov: Of course it is not so. Last year diesel and gasoline prices were falling, especially in late autumn. There is a correlation. We just pay attention to the fact that for the last 5 years prices have been constantly growing. Oil prices are growing. And of course gasoline prices don’t keep up with oil prices. But I would like to say that if we want cheap gasoline, we should close our borders.

Pozner: Why so?

Alekperov: Because we won’t hold our market anyway, as it will go to neighboring territories.

Pozner: Why?

Alekperov: Because if prices are doubled there, businessmen will carry fuel there and sell it there. We have to balance. In Russia only two goods cost less than in the rest of the world – oil and gas. The same products have world prices – clothes, food, metals, equipment. Fuel prices on the Russian market will always be lower than in neighboring territories. But today fuel prices depend on the tax policy provided by the state. It depends on electricity prices.

Pozner: As a person who heads a major private oil company, do you think the state tax policy toward oil companies is right?

Alekperov: I think it is not flexible. It is right, but not flexible. We suggest that excise policy should depend on world prices. When oil prices are high, the state profits from oil exports, excise revenues reduce. When oil prices decrease, the state gains less from exports, and excise revenues should be increased. This is a flexible policy. It will enable our citizens to have stable prices.

Pozner: Speaking about Iran, if Iran is bombed, I think it is possible, how will it influence prices?

Alekperov: I think the current price ($124-125) has already taken the risks into account. The risks are potentially present.

Pozner: Was there something more you wanted to say, but couldn’t?

Alekperov: No, I was honest to you.

Pozner: Haven’t we missed anything?

Alekperov: I think we haven’t.

Pozner: Alright then Marcel Proust. The first question. What do you appreciate most of all of what you possess?

Alekperov: I appreciate relations in my family most of all.

Pozner: What is your favorite occupation?

Alekperov: My job.

Pozner: How long do you work every day?

Alekperov: When I came to Western Siberia I determined an eight-hour working day – from 8 a.m. to 8 p.m.

Pozner: What is your favorite female name?

Alekperov: Larisa.

Pozner: What about male name?

Alekperov: Yusuf. My father’s name is Yusuf.

Pozner: What are you scared of in life most of all?

Alekperov: To make a fool of myself.

Pozner: What don’t you like in yourself most of all?

Alekperov: I think softness.

Pozner: What do you appreciate in a woman most of all?

Alekperov: Decency.

Pozner: And in a man?

Alekperov: Professionalism.

Pozner: Where and when have you been happy most of all?

Alekperov: In Western Siberia.

Pozner: If you face God, what would you tell him?

Alekperov: I'd ask him not to change anything in my life.