Gasoline becomes cheaper after the authorities decide to temporarily stop exports

Exchange fuel prices fell sharply after the government decided to impose an embargo on gasoline exports for the second time in recent months. The export ban will take effect from March 1 and will last six months, which will give regulators time to solve problems with market saturation amid a decrease in available gasoline production capacity. Experts believe that the measure will curb gasoline prices, while refineries still have the option of exporting non-commercial fractions.

Wholesale fuel prices at St. Petersburg International Trading Exchange promptly responded to government statements about a ban on gasoline exports from March 1. Thus, the most popular brand AI-95 fell in price by 0.8%, to 57.5 thousand rubles. per ton, AI-92 – by 3.3%, to 47.9 thousand rubles. per ton. Off-season diesel fuel fell in price by almost 3% (to 57.9 thousand rubles per ton). Prices for summer diesel fuel dropped by 0.9% to 59.5 thousand rubles. per ton. This is the first decline in prices since mid-February, which have since been actively growing in anticipation of the start of the active demand season – for example, the exchange price for AI-95 gasoline has increased by 10.3% over the past two weeks.

How stated On February 27, a representative of Deputy Prime Minister Alexander Novak, the ban on gasoline supplies abroad will be in effect for six months. It is also planned to increase the standard for diesel fuel sales on the stock exchange to 16% of production.

The main reason for the increase in fuel prices was the reduction in its production due to accidents at several large oil refineries, primarily the Nizhny Novgorod Oil Refinery of LUKOIL.

Rumors about a possible ban on gasoline exports have been circulating since January. But before this, the authorities assured that this was not necessary and that the Russian fuel sector was stable, despite unscheduled repairs at refineries. Thus, Energy Minister Nikolai Shulginov February 20 notedthat the Ilsky Refinery has already been launched, and the shutdown of the Rosneft Tuapse Refinery does not have a significant impact on the domestic market, since the plant is initially focused on exporting petroleum products. According to the official, repairs to the refinery will take several more months.

The government already has experience introducing such bans. Previous restrictions on the export of gasoline and diesel fuel acted from September 21, 2023 and were withdrawn at the end of December.

At the beginning of October, the government approved a number of other measures: it restored the full payment of the fuel damper, which was halved in August, introduced protective duties for exporters who are not producers of petroleum products, and also increased the standards for sales on the stock exchange (from 13% to 15% for gasoline , from 9.5% to 12.5% ​​for diesel).

Managing partner of Petroleum Trading Maxim Dyachenko notes that Russia exports from 100 thousand to 800 thousand tons of gasoline per month and 1.2–1.8 million tons of its fractions (non-commercial fuel, mainly naphtha). “That is, producers can export gasoline in the form of naphtha, but the economics of refining will suffer,” he says. At the same time, from the point of view of consumers, this measure should lead to saturation of the market and its protection from a surge in prices during seasonal repairs and peak demand.

Alexander Kotov, head of the Neft Research consulting department, believes that given the emergency shutdown at LUKOIL-Nizhegorodnefteorgsintez, a repeat of the crisis would be quite possible.

In his opinion, there is no question of a systemic shortage of gasoline (gasoline production in 2023 amounted to 44 million tons, domestic consumption – about 36.5 million tons), but periodic imbalance of the market is possible against the backdrop of seasonal repairs at refineries in the spring and autumn.

At the same time, the expert notes that gasoline supplies to the domestic market have increased since the beginning of this year compared to the same period in 2023 (including AI-95 by 10%, to 47.5 thousand tons per day), and gasoline exports decreased by 22%, to 22.4 thousand tons per day. Neft Research associates this with the reorientation of LUKOIL flows to the domestic market to supply its own network of gas stations. The company estimates the fuel shortage for its gas stations at 800 thousand tons by the end of the year.

Olga Mordyushenko