After stopping the export of diesel from Russia, the country may begin to see a surplus.

On the first day after the suspension of fuel exports from Russia, prices for petroleum products on the stock exchange continued to fall, and market participants continued to discuss with the authorities possible options for long-term measures. But negotiations are difficult, and in a week, according to market participants, a large-scale surplus of diesel fuel will begin. Experts believe that refineries have one to two weeks until they become overstocked, after which they will be forced to reduce production, which, in turn, will worsen the gasoline shortage.

Transneft, as part of a government decree banning the export of petroleum products from Russia, stopped shipments of diesel fuel through pipelines in the ports of Primorsk and Novorossiysk, company spokesman Igor Demin said. Prime Minister Mikhail Mishustin approved the corresponding restrictions, which should reduce the prices for gasoline and diesel fuel in the domestic market, which have been updated many times, on September 21. “

Against the backdrop of such radical measures, prices for petroleum products at St. Petersburg International Trading Exchange accelerated their decline on September 22. Thus, AI-92 gasoline fell in price by 9.6%, to 55.9 thousand rubles. per ton, AI-95 grade – by 10.8%, to 59.4 thousand rubles. per ton. The cost of diesel fuel dropped the most – by 14.5%, to 61.4 thousand rubles. per ton. But such a drop is still not enough for oil companies to receive damper payments in September, which will compensate them for part of the difference between the domestic price and the export alternative. According to Reuters calculations, in order to pay the subsidy, the price of gasoline must decrease by another 7.5 thousand rubles. per ton, diesel fuel – by 22.5 thousand rubles. per ton.

On Friday, the situation was once again discussed at a meeting with market participants at Deputy Prime Minister Alexander Novak. It was noted that there was no shortage of fuel in the wholesale and retail segments and the presence of sufficient reserves. According to the Central Dispatch Department of the Fuel and Energy Complex, the total inventory of motor gasoline at refineries and oil depots as of September 20 amounted to 1.9 million tons. The stock of diesel fuel at factories, oil depots and in the Transneft system amounted to 2.95 million tons, the government press service reported.

Kommersant’s sources familiar with the course of the meeting noted that it was “unsuccessful” and the oil companies were unable to find a compromise with the authorities.

At the same time, refinery owners were actually prohibited from reducing processing. According to Kommersant’s interlocutors, meetings will be held weekly until a common position is developed. But, market participants say, oil product producers do not have time for long discussions, since in a week Russia will begin a large-scale surplus of diesel fuel, production volumes of which are approximately twice the level of consumption on the domestic market. So a reduction in load is inevitable, they note.

A Kommersant source familiar with the situation notes that the possibility of redirecting pipe diesel fuel from export to the domestic market can be estimated at 200–300 thousand tons per month and, based on the maximum possible level of Transneft reserves of 1.1 million tons, the company will be able to accept no more than 400 thousand tons before its work is complicated by excess diesel fuel. At the same time, refineries have one to two weeks of normal operation, he says, before they are “flooded” with diesel fuel and are forced to reduce production. The first candidates for cutting down on processing are plants with large export plans for diesel fuel for September (Volgograd Refinery, Kinef, Taneko, Tyumen Refinery, Perm Refinery), Kommersant’s source believes.

However, he believes that the reduction in refining will lead to an increased shortage of gasoline in the domestic market. Interlocutors at several companies confirmed that their gasoline balance in September was in short supply. Gazprom Neft will likely continue to experience gasoline shortages in October due to autumn repairs.

Olga Mordyushenko