Column by Yuri Barsukov about the situation in the fuel market

Every fuel crisis in Russia is always a regulatory crisis, and 2023 is no exception. In fact, the situation that has developed this year cannot even be called a full-fledged crisis, since the symptoms of a real fuel shortage appeared only in certain regions and at individual gas stations, and did not cover entire federal districts, as was the case in 2011, 2014 or 2018. The increase in wholesale prices that occurred this year, which is indeed significant, is explained entirely by market circumstances, and above all by the weakening of the ruble, which increased the profitability of exports. Although refinery repairs took longer than usual, there were no major accidents this year – despite ongoing drone attacks on major refineries.

It was the way the government responded to the market this year that turned a typical seasonal inconvenience into a real problem. First of all, back in March, at the instigation of the Ministry of Finance, a decision was made to cut the damper – then it was quite understandable against the backdrop of the budget deficit. But it is unclear why it could not be revised in June, when the scale of problems with the budget had decreased and the situation in the fuel market had become tense.

Further, Deputy Prime Minister Alexander Novak, who oversees the fuel sector, starting in June, frightened the market with one or another option for limiting fuel exports. It is unclear how successful such an approach would be in principle, but the effect of these verbal interventions, not backed up by any real actions, ultimately turned out to be the opposite. And at the end of August, when wholesale prices went up even despite the efforts of the largest oil companies to hold them and save themselves 200 billion rubles. payments for the damper, no one believed in the statements of officials about the introduction of a list of special exporters, etc.

Now on the government’s agenda is the establishment of protective export duties on petroleum products. It is quite obvious that these duties, given the need to amend the law, can be introduced no earlier than November – and in November it will no longer be necessary and even harmful, since the seasonal demand for fuel will already fall, and oil companies will need to export it somewhere. The most reasonable thing would be to do nothing, just get through the coming month and then think about a longer-term mechanism for balancing the domestic market. Adapting the damper with increased payments is one possible solution, but companies also need to be encouraged to quickly introduce new production capacity, especially for high-octane gasoline. This summer has shown that there is not enough gasoline in the country, given the addition of several million people in new regions and a global change in logistics. An increase in duties will not help here, but will only reduce the interest of oil companies in new investments in refining.