A compromise has been found for gasoline prices – Kommersant FM

Russian authorities recommended oil companies to keep prices at gas stations at the level of September 21, 2023, Interfax writes, citing a source familiar with the minutes of the meeting with Deputy Prime Minister Alexander Novak. The measure applies to vertically integrated companies. On October 6, the government announced that from October 1 it had decided to double compensation for such market players. Thus, the Cabinet of Ministers decided to restore the fuel damper – companies will be able to fully return lost income when selling fuel on the domestic market.

As a result, prices at gas stations should gradually decrease, noted Alexander Pasechnik, head of the analytical department of the National Energy Security Fund:

“For several months, prices have been striving for new highs on the exchanges, so, naturally, the damping history had a very strong influence on the situation. Now, in fact, oil workers will work in a more comfortable mode. Probably, a compromise has, in fact, been found.

According to the damper, significant investments in oil refining will be returned, and this, in general, should play a certain role and restrain prices at gas stations or return them to certain levels to which regulators guide market players. This is the social mission of oil companies.”

Some large vertically integrated companies managed to comment on the measures taken by the government. Thus, the head of LUKOIL, Vadim Vorobyov, said on the Rossiya 24 TV channel that the adopted package of measures is beneficial to both fuel producers and consumers.

At the same time, exchange prices for gasoline and diesel in the country have only increased since October 3. The return of compensation to large players as a whole can stabilize the situation on the market, but independent fuel sellers are unlikely to be able to return prices to the level of September 21 without losses, Ekaterina Savkina, managing partner of the GP Vympel gas station network in Saratov, is sure:

“It seems to me that the oil workers were bargaining in every possible way for the damper: volumes of fuel, which were sometimes enough, sometimes not, and prices, which either grew or rolled back.

Probably their ultimate goal is to return the damper to its previous conditions. When it was there, we, as independent gas stations, survived during that period, it was normal.

At the same time, of course, at the moment we are simply forced to reduce all operating and capital expenses. In the future, this would affect the level of service and security, so no one wanted to do this. But many people are already running out of financial reserves.

Thus, smaller companies that did not have a “cushion” simply made a decision for themselves and suspended their activities at a certain point. The rest of the market players have almost used it up, and their psychological resources are also not unlimited.”

Retail prices for motor fuel in the capital at the beginning of this week showed a decline for the first time in a long time. According to the Moscow Fuel Association, on October 2, diesel, as well as 92nd and 95th gasoline, fell in price by an average of 30 kopecks.

The government measures approved at the end of the week will help stabilize retail prices in the long term, but not immediately. This is what Sergei Kondratyev, deputy head of the economic department of the Institute of Energy and Finance, thinks:

“The return of dampers in full is a very important factor in stabilizing the cost of fuel on the wholesale market, because for manufacturers this means an increase in the subsidy by 15-17 rubles. per ton. This is very significant and, of course, it will be broadcast at retail.

Moreover, this sector will soon begin to receive cheaper fuel, which was purchased at low prices at the end of September.

In this regard, I think that in the next month and a half we will see a reduction in retail prices, it will not be significant, but still.”

Against the background of rising exchange prices for 92 and 95 gasoline, the Federal Antimonopoly Service previously demanded that oil companies and private gas stations reduce the cost of fuel. However, later the head of the FAS, Maxim Shaskolsky, clarified that prices should be reduced to economically justified.

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Vladimir Rasulov