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Meeting with Government members

June 20, 2018, The Kremlin, Moscow

The President held a regular meeting with Government members.

The discussion covered current issues, in particular the effect of the situation in the fuel market on various branches of the Russian economy, the start of the summer tourist season, children’s summer recreation and spring flood relief.

Minister of Healthcare Veronika Skvortsova made the keynote speech on the availability and quality of medicines following the introduction of data analysis systems.

* * *

President of Russia Vladimir Putin: Good afternoon, colleagues.

Everyone is busy watching football, and taking pleasure in the performance of our athletes, football players. We wish them success in the remaining matches.

However, life goes on as usual. The working issues that face the Government have not gone anywhere. Therefore, today we will talk about the affordability and quality of medicines now that information and analytical systems have been introduced in this sphere.

Before we begin, let us review a few current issues, primarily, of course, the situation in the fuel and lubricant market.

Mr Artemyev, you have the floor.

Head of the Federal Antimonopoly Service Igor Artemyev: Mr President, colleagues,

Recently, we have seen stable retail and wholesale prices, as well as declining stock index prices, which means that the stabilisation is becoming more solid. It is safe to say that in the short term these prices will increase within the confines of existing and growing inflation.

We believe that these, as well as future measures, and future prices are closely tied to the tax reform, which is a subject of a separate current discussion in the Government and at your level, Mr President. However, our goals in the negotiations with the oil companies in the wholesale sector have been achieved.

We noted a slight increase in prices of individual petroleum products by a fraction of a percentage point, which reflects the independent gas stations’ bid to improve their margins. We have responded to this. For example, we initiated a case in Crimea to curb attempts to charge monopolistically high prices, and we will see it to completion. We have issued warnings to eight oil companies. In other words, if someone is trying to act outside the law, we intervene and stop it.

In the end, to date, the Government’s goals and, accordingly, the timely reduction of excise taxes have led to the results that the people and the Government were looking for. The tax reform and subsequent actions depend on it.

Vladimir Putin: Mr Kozak, are you aware of the proposals to make all oil-producing companies with a production license send certain amounts of oil to the refineries with subsequent mandatory sale on the domestic market? Have you heard such proposals?

Deputy Prime Minister Dmitry Kozak: Yes, we have and we agreed on it in principle. The volume of exchange trade and fuel supplies to the domestic market have increased significantly. As of two days ago, deliveries to the exchange increased by 45%, and the volume of exchange trade can be increased accordingly. This will also help stabilise prices.

This is not the issue. The oil companies are meeting their obligations. We agreed – I literally discussed this issue with you in a live broadcast – that if the agreements are not implemented, and if high oil prices on the global markets exert even more pressure… Even today, the oil industry loses one billion rubles every day in revenue from selling fuel and lubricants on the domestic market at our target price of 40 rubles per litre.

Vladimir Putin: They are not losing anything, this is just a shortfall in revenue.

Dmitry Kozak: Not losing, right, but this represents a loss of profit. In this economic situation, it is also very difficult to ask businesses to be altruistic, so we agreed that in case of a large disparity, we will offset it by temporarily increasing the oil export duty during periods of high prices.

Vladimir Putin: That is clear, we discussed it. I am talking about something else now. Some have come up with a different mechanism, which is to make all those with licenses ship a portion of their oil (they even specified the number – 17.5 percent) to the refineries with an obligation to sell the products later on the domestic market. Did you have a chance to discuss this with them?

Dmitry Kozak: We did. We have an agreement, and they comply with it. We can develop a binding legislative norm.

Vladimir Putin: But so far, there has been no need to?

Dmitry Kozak: Correct, there is no such norm.

Vladimir Putin: Good.

Mr Patrushev, what about the prices of fuel and lubricants in agriculture?

Minister of Agriculture Dmitry Patrushev: Mr President, one of the factors that influenced the preparation and implementation of the spring sowing campaign, was indeed the increase in the fuel and lubricant prices. Diesel fuel cost about 52,500 rubles per tonne on June 14. The rising prices of fuels and lubricants are also a risk for the preparation and timely conduct of harvesting and other autumn work, when agricultural producers’ spending on these usually doubles compared to the sowing campaign.

Thus, while during the sowing campaign, farms consumed 1.7 million tonnes of fuel and lubricants, the projected volume for harvesting and autumn fieldwork is 3.7 million tonnes. Since petroleum products account for about 10 percent of the total cost of production in agriculture, the price increase that occurred this year will entail a number of additional costs for agricultural producers, which may affect the price of their end produce.

In this regard, we propose working out a set of measures that will compensate agricultural producers for the losses they incurred as a result of the increase.

Vladimir Putin: What kind of measures? Are you going to discuss this at the Government meeting?

Dmitry Patrushev: Yes, we are going to discuss this.

Prime Minister Dmitry Medvedev: We will hold a special meeting, Mr President, to discuss this issue.

Vladimir Putin: Fine.

Mr Ditrikh, what about airfare now that fuel prices are up? The high tourist season is already here.

Minister of Transport Yevgeny Ditrikh: Yes, there are a number of issues. With your permission, I will provide a brief overview. Overall, air transport this year is expanding, with our citizens traveling both across the country and internationally. In some cases, we do not even have enough time to respond to all requests.

In 2017, 62.5 million passengers were transported. That is 18.5 percent more than in the previous period. This year, we have already achieved 12.5 percent growth in five months compared to the previous year. The growth continues.

We try to build on our transport capacity. We increased capacity on the main routes by 4 percent this year as compared to 2017: by 9 percent on international routes and by 7 percent on regional routes. We try to respond in a targeted way to the transport issues arising now.

I want to report that in the Far East, such questions are raised by the governors. Nordwind Airlines made available an additional two flights a week to Magadan beginning July 4. Yesterday, it also launched a direct regular Khabarovsk-Simferopol flight on a wide-body aircraft. Rossiya, Ural and Aeroflot airlines have joined this work. We are implementing two programmes to support domestic air transportation, including regional ones, and including air service to Crimea or central Russia.

With regard to airfare, of course, changes in prices of fuel, lubricants and jet fuel affect the industry. The Government is looking into this issue carefully. Prices have been stabilised currently.

In order to preclude ticket shortages and to stabilise prices, we are considering a number of support mechanisms. In particular, in conjunction with the Minister for the Far East, proposals have been made to expand subsidies for air service to the Far East. We will soon submit these proposals to the Government.

Vladimir Putin: The average tourist package price to travel in Russia is half as much as going abroad. It is 41,000 rubles for Russia while it is 82,000 to go abroad. How has this holiday season begun?

Head of the Federal Agency for Tourism Oleg Safonov: Mr President, colleagues,

The summer tourist season in the Russian Federation has begun successfully. Holidays have become more popular with Russians now. The total volume of air tickets sold for June to August has grown by 9 percent compared to last year, and by 18 percent on domestic flights.

Those who go abroad are safely protected. The total volume of reserve funds and personal liability in the framework of the Association of Outbound Tourism is over one billion roubles; in addition, tourist agencies have insurance worth more than 22 billion roubles. This is the highest level of financial guarantees provided for tourists in the history of Russian outbound tourism. Russians are provided with attractive tour options in Russia. Domestic trips account for over a half of all the tickets sold.

This season we are seeing an increased interest in family holidays: over 52 percent of purchases. Package tours across the Russian Federation are also popular. This competitive product includes accommodation, flights, meals and tours and allows savings of up to 30 percent compared with individual tours.

The geography of domestic trips is getting wider. This year, tours to Kamchatka, Sakhalin and the Kuril Islands are being sold.

As you mentioned, Mr President, the average trip in Russia costs half as much as going abroad: 41,000 rubles compared with the 82,000 needed to travel abroad. Anapa and Crimea are the most available seaside resorts this June: a weeklong holiday for two including a return flight from Moscow will cost about 20,000–22,000 roubles and 28,000 to Sochi. Prices are quite reasonable.

Crimea is becoming the most popular Russian resort area. As of June 1, over 1.5 million people have visited it since the beginning of this year, 26.5 percent more than last year.

Tourist numbers this year are expected to grow by 20 percent to over 6.5 million people due to the opening of the Crimean Bridge and the new air terminal in Simferopol. The number of beaches for the high season has increased to 431 which is 44 more than last year, 81 hotels and spas have been upgraded and renovated.

The opening of the bridge will facilitate a reduction in construction costs on the peninsula and in the prices of fuel, goods and services. We think that this will directly affect the costs of Crimean tourism and may subsequently cut the price of a holiday for consumers.

A single logistically connected beach cluster has been established in the south of Russia. Both Crimea’s and Krasnodar’s tourism and recreation facilities are becoming accessible to holiday makers. The growth of tourism in Crimea will also increase the number of tourists in Krasnodar Territory.

From May 1 through June 15, the number of tourists in Krasnodar Territory reached two million people, 17.8 percent more than last year. Hotels and tourist attractions were prepared, tourist areas were expanded and improved, beaches were cleaned and equipped, free Wi-Fi internet access was provided.

A project offering a free guest card for Krasnodar Territory’ spas was launched this summer. It is a single loyalty card that offers discounts for hotels, spas, cafes and restaurants, and various entertainment options, and the discounts are considerable – from 10 to 50 percent.

Thirty-two facilities providing accommodations offer all-inclusive deals on the Russian Black Sea coast in Anapa, Gelendzhik, Sochi, Tuapse area, with 20 such facilities located in Crimea.

The minimum rate of a holiday in Krasnodar Territory and Crimea with accommodation in private homes starts at 550 rubles a day per person.

The most popular regions among tourists are Moscow and Moscow Region, St Petersburg, Leningrad Region, the Republic of Karelia, Stavropol Territory, Rostov Region, Karachayevo-Circassia, and the Republic of Tatarstan. These regions lay emphasis on infrastructure preparation, improvement of streets and public places in the cities, cleaning, equipping beach areas, and compiling an event schedule.

The FIFA World Cup has kicked off successfully for many fans and tourists from various countries to enjoy. We note a growing interest in the host cities as tourist destinations. This is related to the active promotion campaign of their holiday and travel potential and the improved transport and tourism infrastructure, service and urban environment.

I would like to note that the World Cup legacy is already beginning to work. I would like to take Kaliningrad as an example. It will welcome 370,000 visitors from late May through June, which is 23 percent more than last year.

The decision of the Russian Government to introduce a 50 percent discount for children’s railway tickets for the entire year, including summer, was an important measure that has given a boost to domestic tourism. Before that, this discount was only provided from September 1 to May 31.

The range of children’s tours, including educational and career guidance tours, was expanded in time for the summer holidays. The growing demand for active tourism, such as environmental tours with visits to national parks, is noted.

Spa holidays at institutions of Russia’s health resort complex are also growing more popular. This is a very important trend in terms of public health, recreation and extending the lifespan of Russian citizens. The growing interest of young and middle-aged Russians in wellness tourism has become a popular trend lately.

The Federal Tourism Agency together with the Russian Academy of Sciences and scientific institutions has developed a system of voluntary classification of service quality at health resorts. It will further promote vacations at health resorts as well as the Russian health resort complex in the country and abroad. We have three categories – standard, business and premium – with ten health resorts having received certificates already: three in Stavropol Territory and seven in Altai Territory. This means that this summer Russian regions provide competitive offers for travel and holidays that fully meet the demands of our citizens.

Thank you for your attention. That concludes my report.

Vladimir Putin: Mr Safonov mentioned children. Children’s holidays must be given priority during the tourist season. In this regard, I have a question for Ms Vasilyeva: how is children’s recreation organised? Over 6 million of our children are planning to go to different kinds of camps, health centres etc. Please, go ahead.

Minister of Education Olga Vasilyeva: Mr President, colleagues,

The first month of our summer health and recreation campaign is coming to a close, and of course, our priorities remain to secure comprehensive safety, to increase the number of children staying in the camps, including children in difficult situations.

As you said, 6 million of our 15.7 million children will be able to have a holiday at 46,000 children’s camps in Russia.

I would like to mention that many positive things have happened in the past year, as the Ministry became the coordinator of this activity. First of all, each region has a registry of organisations offering services in children’s recreation and holidays. One cannot bid in a procurement tender without having three year of experience in this area, which is very important.

We have drafted a standard form of contract between the heads of every children’s recreational organisation and parents to clearly delineate the rights and responsibilities of each party.

We also proposed an initiative to enhance administrative responsibility for failure to provide information to the registry. Let me reiterate, every region has these registries.

Of the 6 million children you mentioned, 1.7 million are those in a difficult situation. This is 300,000 children more than last year.

Many of these remain at home (slightly over 30 percent of the children are currently at children’s holiday and recreational camps). We propose the following: to organise other forms of leisure activities such as local clubs, public sports events, military-athletic events and guided tours. And since we have done a lot to spread Quantoriums throughout the country, we have also introduced summer engineering holidays. Now those children who did not attend a Quantorium can spend special engineering shifts there.

I would also like to stress the following. This year 741,000 adults are working with our children; 404,000 of them are educators, 48,000 medical staff, and the key is that for the first time in recent years we have 86,000 camp councilors, half of them students who have taken a special training course in the basics of councilor activities. This course will be offered at 154 universities and colleges by September 1, 2018.

What challenges do we face? The most urgent problem is worn-out infrastructure. I said we have 46,000 camps this year, but this is 526 fewer than last year, and the reason for that is the same – decrepit infrastructure and the need to upgrade. This is probably the major problem facing the regions and the federal ministries.

Thank you.

Vladimir Putin: Mr Zinichev, can I ask you to brief the meeting on security arrangements for children during the summer holidays?

Emergencies Minister Yevgeny Zinichev: Mr President, the Emergencies Ministry continues its supervision and preventive measures even though summer holidays started about three weeks ago. As Ms Vasilyeva said, about 46,000 various children’s camps are under control. Of this total, 1,500 camps are located in or are close to forests, which we view as a threat.

In order to prevent any fire safety violations more than 500 legal entities and almost 1,500 executives faced administrative charges during this period. More than 6,000 violations of mandatory requirements were corrected in facilities of this kind.

Divisions within the State Inspectorate for Small Vessels issued more than 350 permits to open beaches in camps.

We pay special attention to children taking part in walking and river expeditions along tourist routes in remote areas. Territorial divisions of the Emergencies Ministry register these groups and monitor them for the entire duration of their journey to be able to provide the necessary assistance without delay.

Special duty stations staffed and equipped by the Federal Fire-Fighting Service were tasked with ensuring fire safety at summer camps in areas not covered by regular fire and rescue divisions.

More than 13,000 volunteer firefighting teams and squads were created by the National Volunteer Firefighting Society. They are staffed by children camps’ staff and equipped with firefighting equipment.

All children’s summer holiday destinations are expected to carry out a series of initiatives, including drills on communications with the administration, service staff and attendants in case of emergency, fire drills, briefings for personnel, teaching children to swim and water safety. These initiatives will be held during every camp session in order to reach most staff members and vacationers.

Mr President, there are a number of issues that deserve special attention. Let me highlight them.

Some children’s holiday institutions located outside cities are fire prone since most of them are built of wood, and are in need of major repairs or reconstruction.

Some buildings in children’s camps cannot be used as accommodation for children since there is no signal linking their fire alarms to fire departments. Ms Vasilyeva said that in some institutions obsolete alarm systems must be replaced by newer models.

Not all water bodies are equipped with special piers used by fire engines to collect water.

In light of the above, the concerned federal and regional executive bodies should take emergency measures to resolve the shortcomings that prevent effective monitoring of children’s health camps and, if and when necessary, consider measures to ensure safe recreation at the meetings of regional Emergencies Ministry commissions.

This concludes my report.

Vladimir Putin: Do as you have suggested. Discuss these issues at regional commission meetings.

Mr Medvedev, I ask you to discuss this matter with the governors and the concerned agencies.

Dmitry Medvedev: Of course, Mr President.

Vladimir Putin: Mr Zinichev, I have one more question. How have you organised assistance to the victims of the spring floods?

Yevgeny Zinichev: Here is what we have done. We received a request from the Acting head of Sakha (Yakutia) for the allocation of 328.7 million rubles from the Government’s Reserve Fund. This money has not been transferred to the Sakha Government so far.

Vladimir Putin: It has not?

Yevgeny Zinichev: The situation in Altai Territory: the required funds – 391.28 million rubles – have been transferred to the regional Finance Ministry. Volgograd Region: the funds have not been transferred.

Vladimir Putin: Mr Siluanov, what can you say to that?

First Deputy Prime Minister and Finance Minister Anton Siluanov: Mr President, we have the necessary budgetary resources for clearing up the consequences of such emergencies. There is enough money in the budget, and it is allocated as soon as we receive the lists of the affected persons, which the regions must provide and the Emergencies Ministry must verify. We allocate the funds the day after we receive these lists.

I can confirm that flood relief allocations have been provided in full to Altai Territory. On June 18, we received a request from the Republic of Sakha (Yakutia) for assistance to flood victims in some populated areas. We will consider this request immediately with the Emergencies Ministry.

Vladimir Putin: Do not take too long. There is also Volgograd Region. This must be done with the regional authorities, and done quickly. There must be no red tape, because people need our assistance. They do not know who is responsible for the delays and other problems.

Mr Zinichev, a great deal depends on how you and your department work. You must organise this work properly, including with the regional authorities.

I ask the Executive Office to plan a special report after this work is completed.

Let us now address the main issue on our agenda.


June 20, 2018, The Kremlin, Moscow