Gasoline prices rise amid growing demand and refinery outages
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The main types of fuel at St. Petersburg International Export Market continue to rise in price against the backdrop of growing demand in the spring and interruptions in the operation of a number of large refineries due to accidents. Quotations for AI-95 gasoline and summer diesel, the active consumption season of which will soon begin, have reached their maximum since the beginning of the year. Market participants expect a further rise in prices for petroleum products, taking into account the upcoming wave of planned repairs at refineries.
Exchange prices for all petroleum products, except fuel oil, in the European part of Russia continued to grow on February 20. Thus, AI-95 gasoline rose in price by 1.46% per day and by 31% since January 9, reaching a peak price since the beginning of the year of 55.5 thousand rubles. per ton. A similar situation arises with summer diesel fuel, the price of which on February 20 increased by 1.24%, to 57 thousand rubles. per ton (by 12.8% since the beginning of the year). Winter diesel fuel, despite the imminent end of its season, has also been rising in price over the past five days (the day before – by 0.84%), but since the beginning of the year its price has fallen by almost 9%. In turn, AI-92 gasoline, the price of which has also been growing, is still far from this year’s maximum, recorded on January 31 at 50.8 thousand rubles. per ton.
Fuel prices on the stock exchange were actively growing in January, but then regulators managed to stop it. The Ministry of Energy strongly recommended that oil companies reduce gasoline exports, and the FAS began to punish traders for using robots in exchange trading. After this, in early February, prices on the stock exchange corrected, but have now won back this decline.
The rise in the cost of petroleum products on the stock exchange reflects concerns among sector participants regarding a possible fuel shortage amid the emergency shutdown of some refineries and upcoming repairs. As Maxim Dyachenko, managing director of Petroleum Trading, explains, key factories have reduced sales volumes at St. Petersburg International Trading Exchange, while demand, on the contrary, is intensifying in the spring. “In addition, market participants have seen the schedule of repairs, the first will begin in March, and are increasing purchases as they expect prices to rise,” he noted. According to the plan, the peak of repairs will be in April. The work will be carried out at six plants, including the Omsk, Antipinsky, Mari and Volgograd refineries.
Petromarket does not consider the current increase in fuel prices to be significant and believes that the market is in a calm state: “Compared to the beginning of February, prices have fallen completely.”
Wholesale gasoline prices in Russia traditionally begin to rise in the spring, as the seasonal increase in demand overlaps with the repair campaign at refineries.
This year, the situation is complicated by an accident at a catalytic cracking unit at the Nizhny Novgorod refinery of LUKOIL, which produces about 200 thousand tons of gasoline per month. On February 20, Energy Minister Nikolai Shulginov confirmed the expectations of market participants, saying that repairs to the installation would take several months. This means that it will not be able to produce gasoline until the summer, reducing the possible supply on the market.
In addition, in January-February, plants in Volgograd (LUKOIL), Tuapse (Rosneft) and Ust-Luga (NOVATEK), as well as the Ilsky Oil Refinery in the Krasnodar Territory, were damaged as a result of drone attacks. However, the attacks, apparently, will not significantly affect the supply of fuel, since these plants, except for the Volgograd Oil Refinery of LUKOIL, almost do not supply goods to the domestic market. Nikolai Shulginov said that the Tuapse oil refinery, whose work was stopped at the end of January due to a fire after a drone attack, will not be launched until June.
As the official emphasized, Tuapse works more for export, “so we are not very worried about the domestic market.” He also said that the Ilsky plant has already completed repairs, and the plant in Ust-Luga has resumed shipments of petroleum products for export.
According to Reuters, Rosneft in January reduced oil refining by 10% year-on-year, to approximately 170 thousand tons per day, LUKOIL – by almost 8%, to 115 thousand tons per day. In general, since the beginning of the year, production of AI-95 gasoline has decreased by 1.8%. But, Nikolai Shulginov emphasized, companies reduced fuel exports by 32%, which stabilized the market.
So far, the increase in wholesale prices on the stock exchange has not affected the dynamics of prices at gas stations. According to Rosstat, from the beginning of the year to February 12, average retail prices for gasoline increased by 0.6%, and for diesel fuel did not change, despite the fact that accumulated consumer inflation amounted to 1.18%.
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