First Deputy Minister of Energy Pavel Sorokin on the causes of the fuel crisis

The First Deputy Minister of Energy told Kommersant about the causes of the fuel crisis and how the costs of increasing subsidies for refineries will be compensated from October. Pavel Sorokin.

— Do you think that if damper payments had not been halved in September, the crisis in the fuel market could have been avoided?

— It is very important to identify the prerequisites that influenced the price increase. This is primarily the weakening of the ruble exchange rate, which, accordingly, devalued by 25%, which immediately led to an increase in the export alternative.

The second factor is the reduction of discounts on Russian oil and petroleum products. It is generally positive for our country, but has also led to the growth of export alternatives. At the beginning of the year, discounts reached $38–40 per barrel, and just by mid-summer they dropped to about $10. Discounts on petroleum products also decreased from $250–270 to $90–100 per ton. We are talking primarily about diesel fuel.

The third factor is the main one, this is an increase in crack spreads – the difference between the price of oil and petroleum products, such as diesel fuel. If at the beginning of the year we observed a level of $130–150 per ton, then by the end of July – in August, crack prices increased to $300 and above. That is, we immediately had three main factors that influenced the export alternative in a very significant way.

In total, the effect on the export alternative exceeded 50–60%, depending on the type of petroleum product. The damper is exactly the tool that over the past few years has greatly helped us smooth out this difference between the domestic and export markets, thereby, in essence, reducing prices for consumers in Russia. But in this situation, external factors significantly outweigh the effect of halving the damper. The latter, naturally, also had an effect to some extent, but less.

— Were the factors you listed expected?

– Look, this is market conditions. If we worked to reduce discounts and gradually moved towards this, then devaluation and the growth of crack in Europe are market fluctuations that are always possible. Well, I don’t think it’s worth commenting on the course now, it’s a given. But the growth of crack in Europe is more likely the result of the short-sighted policy of Western countries, which themselves have created a shortage of diesel fuel, introducing all sorts of restrictions on the global energy market, interfering with logistics and normal trade flows.

— At what stage is the damper adjustment?

— The Ministry of Finance is preparing a bill. We are actively working with them in this area. The decision to restore the damper with a coefficient of 1 (Kvr) to the same extent as we observed before September was already announced by the government on October 6.

— Will other parameters of the damper formula not change?

— At the moment, a decision has been made regarding restoration, other parameters are being discussed. In general, we are still inclined to believe that the damper parameters meet current tasks. Although, again, separate discussions are possible.

— That is, the position of the Ministry of Energy is to return the increasing coefficient, but not to touch other parameters?

— We believe that the damper formula meets current tasks, but everything will depend on market conditions. Now, according to our plans, the adjusted damper will begin to operate on October 1 (retroactively.— “Kommersant”).

— How will the increase in damper be compensated for the budget?

— This issue is being studied. The damper has a compensation coefficient KABTD, due to which the mineral extraction tax in the formula will automatically increase. This compensates for most of the increase, nothing changes here. Other sources of compensation are being discussed – this is a damper, which will not be paid for September (due to rising fuel prices.— “Kommersant”), And so on. The main principle is that the burden on oil refining for companies supplying fuel to the domestic market does not increase and that oil production should not be an additional source.

— Will the government issue a separate decree stating that the export of diesel fuel is possible only from refineries that send at least 50% of the fuel to the domestic market?

— The order was given by the government, and in accordance with it, exports are carried out in October. In the future, the principle will remain the same, but may be adjusted depending on market conditions and needs.

— The Kirishi oil refinery of Surgutneftegaz and the Volgograd oil refinery of LUKOIL have not yet met such a requirement. How will they execute it?

— The meaning of the order is precisely for everyone to participate in the formation and filling of the internal market. Technological nuances will be taken into account there, but most factories have the opportunity to increase supplies to the domestic market and should do so.

— Is there currently a shortage of gasoline production capacity due to the annexation of new territories?

— There is enough gasoline production capacity to supply all regions of the Russian Federation.

— Are companies not working on plans to introduce new capacities in connection with the growing number of consumers?

— New capacities cannot be introduced quickly. All existing plans to modernize the refinery continue to be implemented. But, roughly speaking, even the current capacity is sufficient to supply all regions; there are no supply interruptions.

Interview taken by Dmitry Kozlov