VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
Transcript of the beginning of the meeting:
Vladimir Putin: Good afternoon.
As you know, yesterday we held a big conference on the performance of the fuel and energy sector in 2010. We discussed its problems and the goals for 2011. Overall, I'd like to repeat that this sector has registered very high growth rates and the quality has also changed. It is enough to mention how much was produced – 505 million tonnes last year – this makes Russia the world's leader in terms of production, and I'd like to emphasise that once again. We have agreed to keep production at this level, not even increase it but maintain this level because we must think about the influence of the scale of Russia's production on global prices, etc. We spoke about the contribution this sector should make to the modernisation of the Russian economy and innovation.
Indeed, fuel and energy companies (this applies to every division – hydrocarbons, oil, gas, coal, electric power engineering, nuclear power and alternative energy sources) have the resources for innovative development. By and large, we can say that the companies play a major role in driving this kind of innovative development, and we should encourage them to do so. Of course, we talked about pressing issues in the industry. One of them (and yesterday we confirmed this again) is the recent unjustified growth of prices on some types of petroleum products (petroleum and diesel fuel), from December to this January. During, or rather before the conference, some companies, such as LUKoil, Rosneft and Surgutneftegaz already brought down the selling prices of their oil refineries. Some of their colleagues announced their decision to lower prices during the meeting. I mean representatives of TNK-BP and Gazpromneft. I have a question in this context: how have our decisions at the conference impacted the market? Has something happened on the market or not? Have prices really dropped or not? Mr Sechin, what can you say on this matter?
Sergei Shmatko: After the companies made decisions at yesterday's meeting...
Vladimir Putin: Mr Shmatko, I was addressing Mr Sechin but if you've decided to take the floor, we'll be pleased to listen to the minister. Please, go ahead Mr Shmatko. We are listening.
Sergei Shmatko: Mr Putin, the companies have decided to reduce prices. According to their reports, their oil refineries have lowered prices by 1,000 roubles (Rosneft), 1,000 roubles (LUKoil), 1,500 roubles Gazpromneft), 1,500 roubles (TNK-BP) and 2,000 roubles (Surgutneftegaz).
In line with your instructions, we have nonetheless organised for the independent collection of information through the Russian Energy Agency, which has 70 affiliates around the country, and gathered information directly at petroleum stations. I must say that not all of the stations have reduced prices from the level of three days ago, but we registered a reduction from 50 kopecks to 1.2 rouble in about 30% of all regions. Maybe, this is partly because more than half of the retail petroleum products belong to independent stations and the procedure for lowering prices after their reduction by refineries will take some time. In our estimates, it will take about three days. Under the circumstances, we have agreed with the Federal Antimonopoly Service (FAS) to continuously monitor this situation. We have also instructed oil companies to work with their contractors, independent suppliers and sellers of oil products to make sure that the decisions adopted are reflected in retail prices. We will continue this work and report back to you.
Vladimir Putin: First, these big companies are usually the owners of large distribution networks. What is important for us? To have the consumer feel the change in his pocket. It should be clear at petroleum stations whether prices have gone down or not.
Second, if prices are reduced at the wholesale level, and this is felt at subsidiaries – petroleum filling stations, others will have to follow suit, whether they want to or not, or they will lose their clients. Mr Sechin, what do you think about this?
Igor Sechin: We have just checked in Moscow. Today, retail prices on winter diesel fuel have gone down by one rouble. This process will continue – we will monitor it.
I can add that the Achinsk refinery has reduced its prices by 1,550-1,555 roubles since January, the Angara refinery by 1,500 roubles, the Samara group of oil processing plants by 3,185, and the Komsomolsk refinery by 1400 roubles. Of course this approach will prompt a reaction in the retail market. We monitored prices in Moscow today, and diesel fuel prices are down one rouble. The challenge now is to keep it that way (we will monitor the situation) and bring it in line with objective market parameters.
Vladimir Putin: FAS, how are things with you? Is Tsyganov here? Tell us how you monitor the situation and what, in your opinion, is happening in the market.
Andrei Tsyganov: We see prices in both the wholesale and retail market dropping. In the wholesale market – Igor Sechin has given you the figures which tally with ours – the spread of price cuts is from 11% at the Volgograd refinery (I mean winter diesel fuel) to 0% at the Omsk refinery. This is not because the Omsk refinery does not want to cut prices but because it doesn’t sell winter diesel fuel at present.
As for retail prices, in some regions there have been no cuts. For example, the Astrakhan, Yaroslavl, Orenburg, Volgograd and Omsk regions, these are the capitals of those Russian regions where oil refineries are located and where the reaction ought to be the swiftest.
At the same time in such cities as Voronezh (this is the Rosneft zone), Sochi, Belgorod and Tambov diesel fuel dropped by 50 kopeks; in Saratov by 1 rouble and 20 kopeks, in Novgorod Surgutneftegaz cut its price by two roubles and LUKOIL at its fuel pumps has made no cuts. In Moscow, it is true, prices have gone down between 50 kopeks and one rouble depending on who owns the filling station. These are tentative data gathered today on the ground by the staff of our territorial branches.
Vladimir Putin: I see. Fine, very well. Mr Sechin, double-check this information with the FAS and carry yesterday’s decision through to the logical conclusion. As I said the logical conclusion should be that money should not remain in the other pocket of these same splendid companies, only in the retail operation, the consumer should feel the difference, he should feel that the reduction is real.
Igor Sechin: I understand, we will continue…
Vladimir Putin: By all means. The FAS must continue monitoring and the investigations the head of FAS Artemyev announced yesterday.
Now about one more decision taken yesterday: extending discount pricing for fuel and lubricants for agriculture during the spring sowing season. We have agreed that the discount will be 10% of the price, but not the current price, but the price that we had at the beginning of last November. That would mean that in some regions discount on the current price would be 30% and more, up to 35% or even 37% today. And I would like the non-government organizations to react to this vigorously. Today we have invited Vasily Zakharyashchev.
Vasily Zakharyashchev (Deputy Chairman of the Russian Agrarian Movement): Thank you, Mr Putin, on behalf of the agrarian movement for your prompt action in resolving this issue because the response has been very positive. But we are not going to stand still because after the sowing season there will be the harvesting of fodder crops and I am grateful to the Cabinet members who have been very forthcoming. Look, consumer cooperatives, Rosselkhozbank… It has been decided to make additional allocations to credit the procurement of seed potatoes. That will help us improve consumer supplies.
And of course, Mr Putin, we are very grateful to you for the party programme, “The Gardener’s House Is the Support of the Family” because that is also an important part of our agricultural market. It is heartening that some Russian regions have announced (without waiting for your instruction) the Year of the Gardener and have been making available additional plots of land, potatoes and planting material. We will monitor the situation. Perhaps we will have to make some adjustments because the prices will be a little different from those of last year, fuel prices will be raised. We will keep you and the Cabinet members posted on this. And we have agreed to be constantly in touch. Thank you.
Vladimir Putin: Yes, and I want you to monitor the decision on the 10% discount on last November’s pricing.
Vasily Zakharyashchev: We will do that.
Vladimir Putin: You have great resources: your organisations are working all over the country, practically in all the regions where agriculture is an important sector of the economy, and it is necessary to watch very closely how these decisions have affected the consumer and what difference they have made to the market.
Vasily Zakharyashchev: Mr Putin, we are holding a congress of Russian farmers in the next few days. We will certainly discuss that issue and take prompt measures. Thank you.
Vladimir Putin: Very well. Take your seat, please. For our part, as the spring field season approaches we will hold a meeting to consider all the problems agriculture faces prior to spring sowing, primarily fuel and lubricants, fertilizer, seed, transport, credit and so on. Please prepare and submit your proposals.
Viktor Zubkov: Very well, Mr Putin.
Vladimir Putin: I have already said that the fuel and energy sector is one of the drivers of innovative development. By the way, today is the 100th anniversary since the birth of Mstislav Keldysh, an outstanding Soviet and Russian scientist, a mathematician, President of the Soviet Academy of Sciences in his time. In this connection I would like to say that Mstislav Keldysh was one of the founders of the Russian Academy of Sciences’ Applied Mathematics Institute, and that research centre is currently implementing a massive research programme. Incidentally, some time ago the government passed a decision to help the Institute. The Institute has made use of the additional money we allocated to create a great new innovative product, the K-100 supercomputer which is the most powerful in the country at present. It can take on the most complicated tasks, which is in fact what it is doing.
I would just like to remind you that the total allocations for R/D this year are 228 billion roubles, 32% more than last year. Additional support will be given to the Russian Academy of Sciences: its funding increased by more than 22 billion roubles compared with the pre-crisis year of 2007 and will now amount to 62 billion roubles. By the way, we talked with the Economic Development Minister this morning and I think we should take a look at the situation with the special economic zones because we felt that this would be a good tool to promote innovative development in the economy. Work is underway in some places and it is going well and producing results. In some areas there are still problems. We should analyze what is happening there. Please choose a suitable venue and prepare such a meeting.
Several current issues. Mr Zhukov, regarding the rules of financing in 2011–2012 and the programmes of modernisation of the healthcare system.
Alexander Zhukov: Prime Minister, dear colleagues. I should remind you that under the law On Mandatory Medical Insurance, regional programmes for modernisation of the healthcare system are being developed (in fact have been developed in all the regions). To remind you, the Federal Budget has allocated 460 billion roubles for two years.
Every regional programme has three main areas. First is the strengthening of the material and technical base of government and municipal healthcare institutions (mainly polyclinics, but also hospitals), the purchase of modern medical equipment, repair and finishing the construction of buildings that are more than 80% complete. The second important area is introducing modern information systems in healthcare. Finally, the third very important area is introducing new standards for medical assistance. This means greater accessibility to outpatient services, including services provided by specialists. The procedure for financing all these activities is spelled out in the rules you signed today. I would like to stress one particularly important thing: the money that we allocated for introducing new medical assistance standards (70% of that sum) must go to pay the specialists both in the outpatient and polyclinic sector and in the clinics, 70%. The remaining 30% of that sum should be used to provide medicines and disposables. Thus when we were implementing the national project, we raised the salaries of therapists, and, if you remember, of ambulance doctors. Now, as part of introducing these new standards, the salaries of specialists must be raised. I would like to draw your attention to this.
Vladimir Putin: Good. We are aware of that. But the thing is to do everything as planned. Because you have mentioned the provision of medicines I would like to ask Tatyana Golikova what is taking place in that area in general?
Tatyana Golikova: First of all, I would like to say that a new law on the sale of pharmaceuticals came into force on September 1, 2010. It provides for a transitional period. I would like to mention several facts. At present the state register of medicinal preparations, which is a publicly accessible information resource, contains 15,280 titles. This is the number of trade names that are distributed in the Russian Federation. Out of that number, 13,860 are actual drugs and 1,420 are pharmaceutical substances that are the basis for drug production. Out of that number 178 new drugs and 64 pharmaceutical substances have been registered since September 1. Similarly, drug prices will be registered under the new procedure.
I should remind you that registration is underway of vital and crucially important drugs, you approved the list of such drugs last November. As of today, we have registered the prices for 8225 vital drugs. Out of that number 506 drugs have been registered in accordance with the new procedure, of which 206 are the prices of drugs which were only entered in the list of vital drugs from January 1, 2011. I would like you to pay special attention to this because in early January the media carried some stories claiming that we were dragging our feet over the registration of drugs.
We are not delaying the registration of drugs. The thing is that applications for registration of certain (very few) drugs were filed in January and not in December or November as they were supposed to be. But now all the problems even with these drugs have been solved. They have been registered and are available in the retail network. If there are questions on this matter, they are only speculation (I go on record stating this) because the prices for drugs have been registered. We have refused to register the prices of two or three drugs. But the reason we did so was that the proposed price was much higher than the price of that drug in other countries.
For example, the Federal Tariff Service which is working with us on the matter, yesterday withheld registration of a drug which in Russia costs 91% more than, for example, in Turkey where the registration procedure is very tough; they monitor this situation very strictly.
Yes, such things will happen in the market because we register prices for vital preparations and our foreign colleagues will have to learn to live with the fact that we will strictly monitor the approximate proportionality of the prices for the drugs that are sold in various countries.
As for price monitoring in 2010, I must say that at the end of December prices in the outpatient segment dropped by 2.64% and in the hospital segment by 2.58%.
In the 50-500 rouble categories, the reduction was 3.9%, and it was 6.5% in the cost for more than 500 roubles. But here I’d like to make a point that we have deliberately decided to allow our domestic producers to revise registered prices once a year to encourage production development. We adjusted for inflation for this year that was registered at 8.5% in the 2010 budget. We did it automatically, without requiring producers to submit any documents. They have the right to file documents if they believe that the price is too low and they don’t have enough money for developing production. But there are procedures available to justify price increases. I’d like to draw your attention to the fact that the figures on reduction have not been registered in all regions of the country. According to your instructions, Rosdravnadzor (the Federal Service for Control over Healthcare and Social Development) monitors prices, and regrettably, I have to say that during the past year prices increased in the Chelyabinsk and Sakhalin regions, the Republic of Tyva, and the Krasnoyarsk Territory. In the outpatient and hospital segments, prices went up in the Kamchatka Territory, the Arkhangelsk Region, the Chelyabinsk Region, and the Republic of Adygeya. As a rule, we discuss the issue with the regional heads and advise them to take adequate measures. In December, on New Year’s eve, we held a teleconference with every Russian region, and encourage them to take measures to provide pharmaceuticals for the population. This is how the matter stands today.
Vladimir Putin: You should continue this work and make the best use of the tools that you have proposed for curbing prices.
Incidentally, at yesterday’s conference on the fuel-and-energy sector we discussed (albeit very briefly) the proposal of the Federal Anti-Monopoly Service (FAS) on regulating prices in this sector. Can you say a few words about this proposal just to inform our colleagues? How the stock-exchange, for one, influences this process?
Andrei Tsyganov: First, I’d like to tell the members of the government presidium that proceedings against those companies that were mentioned at the conference in St Petersburg were instigated yesterday, and relevant orders signed. We will fix the date for reviewing these cases in the next few days. But it’s clear that monitoring and regulations will not help eliminate the drawback to this market. We have always favoured a switch to more open, transparent and understandable processes for price control. We see two important points here.
First, the idea of a price formula as some indicative mechanism, a substantial deviation from which can be considered a violation of anti-monopoly legislation, and in this case the price increases will be qualified as unjustified. I’m talking about the relationship of the prices on individual oil products and crude oil to global market prices with the account of net back value and equal profitability of these commodities either when they are exported from Russia or distributed to the domestic market. So we should take into account duties, excise taxes and transportation costs.
Vladimir Putin: You should say this in Russian. Some people know what net back value is and some don’t. But this will be not a world market price, but a world market price minus transportation, tax and other costs…
Andrei Tsyganov: and excise duties…
Vladimir Putin: So, say this in Russian so that everyone understands what you mean. Repeat this again, please.
Andrei Tsyganov: So, the price of petroleum and oil products on the domestic market should be determined with due consideration of the prices on the world market minus the costs and additional expenses of Russian oil companies in exporting oil and oil products, that is, customs and excise duties, and transportation costs. The second mechanism would improve the rules of trade in oil and oil products on the stock exchange (in particular, the decisions that have been drafted to register off-stock exchange contracts on oil and oil products). I think they are very important because they expand the base for comparing contractual prices to those on the market for these products.
Moreover, the current mechanism used on domestic stock exchanges that regularly trade in oil and oil products is not perfect and needs some adjustment. We need more clear rules that would remove the drawbacks that we have registered in trade in oil on stock exchanges. This applies to insufficient supply, or so-called big targeted deals, sometimes within one and the same group (when a plant sells big amounts of oil through a marketing company from its group, it is perfectly clear that the price is fixed in advance rather than influenced by the stock exchange.) This also applies to irregular sales and lack of anonymity in trade. The new rules of trade on the stock exchange will easily eliminate these drawbacks. I think this could be done in the near future.
Vladimir Putin: Yesterday your superior said that current trading rules have pushed prices as far up as possible rather than down to allow marketing agencies to charge higher rates.
Andrei Tsyganov: This is so, but that does not mean that exchange trade is ineffective as a pricing mechanism. Just the other way round. It just needs to be properly organised.
Vladimir Putin: And improved.
Andrei Tsyganov: Yes.
Vladimir Putin: Now I would like you to take care of these proposals. And you, Mr Shuvalov, please follow up on this with Mr Sechin. It is clear that we need to adjust exchange trading in every way. But the process should function properly.
Now, Mr Basargin, you have the floor. What are the immediate plans for the federal law on heat distribution?
Viktor Basargin: Thank you, Mr Putin. All heat distribution agencies have been waiting impatiently for this plan, which has now been approved. Within the next six months the Ministry of Energy, the Federal Anti-Monopoly Service, the Federal Tariff Service, and the Ministry of Regional Development are to adopt over 30 regulatory documents on key aspects of heat distribution. (The plan itself is calculated to last one year.) They are concerned with heat distribution rules, system connection rules (sought by all our commercial facilities), heat supply plan requirements, investment programmes and some other basic issues.
For the public, the adoption and implementation of the plan will mean new quality and reliability for heat distribution and the possibility of their monitoring. In other words, we will also regulate all issues connected with the information provided by the heat distribution agencies. Today, consumers can keep watch heat supplies either themselves or through a management company or a homeowners association. For the authorities, tariffs and approval of investment programmes and other aspects will be the main concern. For heat consumers and commercial bodies, it will be connections to the supply system. For the heat distributors themselves, this is going to be transparency of operation, pricing, tariffs and everything linked to investment plans and return on capital invested. Our further goal is to attract investment in this business. All in all, the system is taking shape and our consumers can look forward to a more dependable heat supply.
Now, Mr Putin, I would like to go back to the first issue – energy prices. We have discussed heat provision. For utilities this is the main subject, no less important than for rural areas. In terms of cost, heat and water account for 60% of the rate. Electricity costs have risen 50% and will translate into a 25% increase in utility bills. We will therefore be monitoring the situation in every region to see how the decisions taken yesterday will affect household charges. We will also be ready with proposals to adjust the plan for our utility agencies.
Vladimir Putin: Good. Mr Krainy, last August we met in Petropavlovsk-Kamchatsky to discuss fisheries and their development, and took up certain issues. One of them, thank God, is now an official document. Will you please comment?
Andrei Krainy: Yes, Mr Putin …
Vladimir Putin: … It is the one connected with customs payments or rather non-payments.
Andrei Krainy: On August 24, we had a meeting in Kamchatka, which was really historical. You issued instructions to put an end to one stupid thing forced upon us. It appeared that the fish caught on the shelf in Russia’s economic area was de jure imported.
Accordingly, fishermen filled out customs declarations and paid to bring fish caught in Russia back into Russia. It was not so much an issue of money: the procedure itself was time-consuming. There was another reason why the fishermen raised the issue. Things came to a head on July 18, 2010 when the Customs Union commission decided to introduce veterinary controls in its jurisdiction. Since the fish was de jure imported, the Federal Service for Veterinary and Phytosanitary Supervision started checking all landed catch. On Kamchatka and in the Primorye Territory the situation began to border on the critical.
The resolution on lifting the duties was passed and signed by you, literally on the evening of the meeting. This cleared the way for increased fish availability on the domestic market because, previously, the industry was better off exporting the fish rather than selling it domestically. I had a conversation with Murmansk today – the most recent example from the ground as the Federal Anti-Monopoly Service says. The fishermen of Murmansk, upon learning that such a resolution was adopted, told me: “Mr Krainy, tell Mr Putin when the occasion presents itself that our wholesale price for capelin today stands at 13 roubles per kilo, and will be dropped to 12 roubles starting tomorrow.” We did not force them to do that – I merely informed them of the decision. So we believe that more fish will be supplied to domestic shops and it will provide additional motivation for local processing. I think this managerial solution will allow us, in summing up 2011, to say that we are following the food security strategy and that more Russian fish will end up on the shelves of Russian stores. Thank you.
Vladimir Putin: Good. But do not forget the other issues we discussed. Make sure you remember them all. I would like to ask those present: Who drives under the influence?
Remark: No one.
Vladimir Putin: That’s good. Starting today, I don’t advise anyone to do this. A Government resolution amending regulations to assess a drivers’ blood alcohol content (BAC) has been signed. I would like Mr Viktor Kiryanov, the new Deputy Interior Minister, to comment on this decision. Please.
Viktor Kiryanov: Today, the Government Commission on Traffic Safety has summed up the results of our work to improve traffic safety. Mr Putin, I would like to inform you that the number of highway fatalities has dropped 3.9%. This means that over 1,000 human lives have been saved. This is the objective of the federall targeted programme. This is a good result, in spite of the fact that the national light vehicle fleet used to grow by almost 1.5 million vehicles annually.
Recent legislative action, including efforts to penalise those driving under the influence (DUI) have also played a role. The number of accidents involving those driving under the influence has soared by 46% since 2004. After legislation stipulating zero tolerance beyond promille content was enacted, the number of accidents decreased by about 1.5% last August, by 8.8% in September and by almost 14.5% in November 2010. The situation has been influenced by the law and by our efforts to deal with this evil plaguing our roads.
Vladimir Putin: In what way will the regulations now change?
Viktor Kiryanov: Under the new regulations, people with a blood alcohol content greater than one part per thousand are forbidden to drive cars, motorcycles or any other motor vehicle …
Vladimir Putin: What was the previous BAC limit?
Viktor Kiryanov: It was 0.3 parts per thousand, and now the amount is 0.1 parts per thousand. But I advise all drivers not to drink. Those who don’t drink are not as dangerous. It’s better not to drink at all when you plan to drive.
Remark: What about kefir fermented milk?
Vladimir Putin: Kefir contains no substantial alcohol. Do you know how much kefir you’d have to drink to test positive?
Remark: You’d have to drink a bucket of kefir.
Vladimir Putin: …a bowl of kefir. How much kefir would you have to drink to test positive for alcohol?
Viktor Kiryanov: I think Ms Tatiana Golikova can tell us about this. But it’s my opinion that kefir doesn’t matter. One must drink plenty of kefir to test positive for alcohol.
Tatiana Golikova: Drivers won’t test positive immediately after drinking kefir.
Igor Shuvalov: Anyway, drivers should be very careful about taking medication and about all sorts of drinks even those containing no alcohol, but they should be careful.
Tatiana Golikova: This is not the only decision we’re working on. We are stipulating restrictions for drivers with certain health disorders who have to take alcohol-containing medication, because this will make them test positive …
Vladimir Putin: Does this include potions with alcohol?
Remark: Valerian-root extract or something.
Vladimir Putin: Who cares about the ingredients of alcohol-containing substances? Obviously, people must react responsibly to road conditions, road signs and markings. This is a priority. Thank you. To be honest, this is a very important issue. It’s good that these measures are yielding positive results. Indeed, reduced highway fatality rates are among those few things where our actions can have positive results. This is very good.
Of all the issues on today’s agenda, I would like to say a few words about only one very important social issue. Support for families raising disabled children. It is common knowledge that some parents, who care about their children, support them and help them to adapt in life, often find it hard to get good jobs, to select a convenient working schedule, to improve their skill sets, if need be, or to launch new careers. Surely, the state should provide assistance and support to these families and help the jobless parents of disabled children.
We are currently working on an ambitious programme to assist with employment. This issue is a priority these days and we need to allocate substantial funding. In all, these programmes help over 4.5 million people. Naturally, such programmes must continue. In 2011, we allocate 105 billion roubles’ worth of federal funding for social support for people who have temporarily lost their jobs and to implement the employment programme itself. We will prioritise conditions to help people receive new jobs in high demand on the labour market. We are modifying employment programmes to a certain extent.
I believe that parents, foster parents and guardians of disabled children should have a priority right to state support, so that they can complete professional retraining courses, improve their skills and become eligible for worthy and better paid jobs.
The legislative amendments have been drafted. I propose approving these amendments today and promptly submitting them to the State Duma. Overall, our efforts should be directed at creating acceptable conditions for disabled people so they can use transport, work, study, play sports, receive medical treatment, etc. The issue linked with the disbursal of this funding for achieving these goals is the right thing to do, so let’s settle it promptly today.
I would also like to propose establishing an organising committee to hold the World Biathlon Championships in Khanty-Mansiisk. We will also discuss this during our work today.
Please, let’s get started.
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