Fivefold Increase in Gasoline Prices Stuns Moscow Motorists : Economics: The city’s mayor says the boost is needed to prevent black marketeers from buying gas in the capital and selling it in other republics.

Imagine the feeling of driving up to your local gasoline station and discovering that the cost of filling up will be $75 instead of the usual $15.

That’s how Muscovites felt Monday when prices at gasoline pumps increased fivefold.

Adding insult to injury, by evening, gasoline stations across the city, which are generally open round-the-clock, ran out of gasoline and closed.

“This is the fourth gasoline station I’ve stopped at, and no one has any gasoline,” Sergei A. Fyodorov, 34, a refrigerator technician, said as he sat in his beige, Soviet-made Zhiguli sedan in front of an empty gasoline station debating with himself whether he could make it to yet another station before his car conked out.

“I waited for 40 minutes at the last gasoline station, and then they ran out,” he added in disgust. “I am fed up with this life!”

For Fyodorov and many other motorists, dry gasoline stations falling on the same day as the dramatic price increases was too much to take.

“I keep hoping that one day all this idiocy will stop,” sighed Yuri, an employee of the Russian Foreign Ministry who would not give his last name. “First they raise the price on gasoline--which is bad enough--but then they run out.

“It’s long past time for the state to give up its monopoly on gasoline,” he added.

Rumors of impending price increases had kept motorists on guard for two months. But Russian officials recently said they would postpone a countrywide boost until the summer, even though the International Monetary Fund strongly suggested increasing gasoline prices by 10 to 15 times as a way to halt the decline of oil production and increase state revenues.

State oil prices are so low that they cover only about one-third of the cost of producing the oil, Eduard Grushevenko, Russia’s first deputy minister of fuel and power engineering, told the Russian news agency Itar-Tass.

Because of the shoddy state of the underfinanced oil industry, Russian oil production dropped to 460 million tons in 1991 from 515 million tons in 1990 and is expected to fall to 400 million tons this year, the Izvestia newspaper reported earlier this year. Unless things improve, the newspaper continued, production will likely drop to 300 million tons within two years.

Increasing the price of oil and oil products is the obvious remedy. But conservative economists and politicians argue that this would cause a chain reaction and necessitate the increase of prices for practically all other goods, many of which are already too expensive for most Russians.

The increase of gasoline prices in Moscow was a politically courageous move, especially at a time when lawmakers in the Congress of People’s Deputies, Russia’s supreme legislative body, are heaping criticism on President Boris N. Yeltsin for choking his people with inflation.

Yeltsin’s radical economic reform plan, which includes lifting subsidies and price controls, has sent prices on most consumer goods soaring since the beginning of the year. Prices on some products--salt, for example--have shot up 100 times. Gasoline prices had been kept at reasonable levels in comparison.

The new gasoline prices, while exorbitant for most Muscovites, do not approach world levels. Even with the increase from 4.5 rubles a gallon to 23 rubles a gallon for 93-octane gasoline, the price is equivalent to only about 23 cents a gallon at the current exchange rate.

Although 23 cents per gallon seems ridiculously low by American standards, filling up a typical Russian-made car’s gasoline tank at the new rate costs about one-fifth of the average monthly salary.

The mayor’s office said that the price increase was necessitated by the fact that a lot of cheap gas was being bought in Moscow and taken to other regions and republics.

The Moscow government had kept gasoline prices artificially low while prices increased in other regions of the Commonwealth of Independent States, Itar-Tass reported. As a result, daily purchases of gasoline grew from 5,200 tons to 8,300 tons, as black marketeers transported the gasoline to areas where prices had already been increased and sold it at inflated prices.

The increase in gasoline prices in Moscow brings them up to par with production costs, Grushevenko said, so there should be no need for further increases.

Free-market economists argue that Russia has no choice but to decontrol oil prices as quickly as possible, no matter how painful it is to consumers.

According to Arkady Volsky, the president of the influential Russian Union of Industrialists and Entrepreneurs, Russia is losing billions of dollars on petroleum products that are bought at low prices and exported through Russia’s open borders with other republics of the former Soviet Union.

“American firms and banks have calculated that $14 billion (worth) have already been taken abroad,” Volsky told the Rabochaya Tribuna newspaper last month. “This means trillions of rubles. Meanwhile, Russia cannot scrape together 9 billion rubles for pensioners.”