Export of fuel abroad will be allowed only refineries

The Ministry of Energy wants to allow only refineries to export fuel in an attempt to curb price increases that have already led to a shortage of petroleum products in the southern regions. According to Kommersant’s information, the relevant draft decree, which is currently being negotiated, will be valid until 2026. However, market participants doubt the effectiveness of the restrictions, especially if all refineries, including small plants that do not produce commercial fuel, are allowed to export.

The Ministry of Energy plans to allow the export of gasoline and diesel fuel only to oil refineries, said First Deputy Minister Pavel Sorokin at a meeting of the State Duma committees on control and agricultural issues. Due to the high export alternative, “a lot of unscrupulous market players, small traders, tank farms” buy fuel at the domestic market price, which takes into account state subsidies in the form of a damper, and then sell it for export, he notes. The draft decree on limiting the number of exporters, according to the official, has been submitted to the government and the presidential administration.

According to Kommersant, the decree provides for the introduction of restrictions for a period until 2026. The export of fuel will be possible “exclusively by special exporters and their agents according to the list determined on the basis of the balance of oil production,” the explanatory note to the draft decree says.

The decree will give the government the right to determine the list of exporters, as well as oil products that will be subject to restrictions. However, so far, according to Kommersant, the exact list of special exporters has not been determined. In late August, as reported by “Kommersant”The Ministry of Energy requested data on exports and production from 70 companies, including not only refineries, but also some traders.

Market participants are skeptical of the proposed measures. On the one hand, in their opinion, if exports are allowed to all refineries, then its volume will not decrease significantly. If mini-refineries are included in the list of special exporters, then it will not be possible to close gray exports, Dmitry Gusev, deputy head of the Supervisory Board of the Reliable Partner Association, believes: “Given the imperfection of the product range, they will continue to divert fuel from the domestic market by obtaining new products by mixing different types fuel or adding additives.

On the other hand, there are doubts that the gray export factor itself is the main factor leading to an increase in wholesale prices. So, from this year, for companies that are not producers of petroleum products, an export duty of 20 thousand rubles was introduced. per ton, which significantly reduced the volume of gray exports. According to Petromarket estimates, the average monthly rate of re-export of gasoline and diesel fuel (in total) in 2023 decreased three times compared to 2022 – from 135 thousand to 45 thousand tons. Even if gray exports are reduced, this will not affect wholesale fuel prices, the company believes. The volume of gray exports is 40 thousand tons for AI-92 and 50 thousand tons for diesel fuel per month, says one of Kommersant’s interlocutors in the fuel market: this is approximately 1-1.5% of total supplies to the domestic market. More significant factors for the market balance were probably the reduction in oil refining in the summer months, as well as the growth in demand against the backdrop of domestic tourism and trucking of goods, including to new regions.

Wholesale fuel prices in Russia have been rising almost continuously since the end of March, but in recent weeks, price increases have led to a physical shortage of petroleum products, mainly in the southern regions.

On September 6, the head of the Ministry of Agriculture, Dmitry Patrushev, bluntly stated that farmers do not have access to diesel fuel. “A week ago, we were talking about the need for fuel and lubricants at some reduced price, because the price has risen a lot, now we are talking about something else altogether. Because we have a problem with availability. Now we will stop harvesting, and we will not be weeded out for winter crops. It will be a disaster,” he said at a meeting of the State Duma Committee on Agrarian Issues (quoted from TASS). The Ministry of Energy has so far maintained that there is no shortage of fuel in the country. Deputy Prime Minister Alexander Novak said on August 30: “In principle, we have no deficit in general in the domestic market today.”

Dmitry Kozlov