Gasoline quotes turn green – Kommersant

Exchange prices for fuel, which began to grow rapidly since the end of April, exceeded the level observed before the outbreak of hostilities in Ukraine. So, on May 11, AI-95 and AI-92 gasolines overcame the highs from October 2021 and February 2022, reaching 59.5 thousand rubles. and 52.3 thousand rubles. per 1 ton, respectively. The cost of fuel is rising against the backdrop of a reduction by the Ministry of Finance of damper subsidies since July, as well as a seasonal increase in demand. This puts pressure on fuel prices at filling stations, as the net retail margin, according to experts, has already fallen to 1 ruble. for 1 liter.

The cost of gasoline on the SPIMEX exchange has been breaking new records for several weeks in a row. Thus, the price of AI-95 rose on May 11 by 0.6%, to about 59.5 thousand rubles. per 1 ton, which is the maximum since October 2021. AI-92 rises in price not so rapidly, its cost increased by 0.05%, up to 52.3 thousand rubles. per 1 ton, which coincides with the level of the beginning of February 2022. After the outbreak of hostilities in Ukraine at the end of February last year and the subsequent Western sanctions, supply in the fuel market significantly exceeded demand, which created pressure on prices. Now the wholesale cost of gasoline has exceeded pre-conflict levels.

The rise in prices is caused by several factors. Thus, the Russian authorities are preparing to halve damper subsidies for refineries from July, which should expectedly lead to a deterioration in the profitability of oil refining, which oil companies will try to mitigate by gradually – and in advance – raising wholesale prices.

“The margin of oil refiners today is 8 thousand rubles. For 1 ton, it used to be less than 2 thousand. If you look at where this margin comes from, due to the damper, in fact, we pay this margin for oil refiners from the budget, ”complained the head of the Ministry of Finance Anton Siluanov at the end of April. The prerequisites for such a sharp decrease in damper subsidies arose due to the fact that the Russian budget received less oil and gas revenues due to an increase in Urals discounts to Brent and a general decline in oil prices in the world. That lower subsidies could lead to higher fuel costs, Kommersant reported on May 2.

The trigger for price growth is also a seasonal factor. In the spring, repairs are carried out at the refinery, at the same time, the demand for fuel increases. So, according to Kommersant’s sources, over the first three days of May, primary oil refining decreased by about 4% (relative to the average level in April), to about 735 thousand tons per day. In addition, according to Kommersant’s sources, in recent years there has been a trend towards an increase in demand for the AI-95 compared to the AI-92, and the current level of production and exchange sales of the AI-95 does not fully meet the needs of the market.

The Ministry of Energy does not agree with this. According to the ministry, in May, shipments of gasoline to the domestic market increased by 6.5% in annual terms, including 8% for AI-95. The volume of average daily exchange sales in May relative to the last week of April for AI-95 increased by 13.8%, for AI-92 – by 16.7%. The companies also accumulated 1.9 million tons of gasoline reserves for repairs, which “is sufficient for this season.” “Changes in stock prices will not significantly affect the cost of gasoline in retail,” the ministry believes.

A rise in the price of wholesale fuel should force gas station operators to start increasing its cost at gas stations to avoid falling margins, but the authorities are trying to ensure that this growth does not exceed inflation.

According to Petromarket, the net trading margin of AI-95 and AI-92 is now only 1.1 rubles. and 1.3 rubles. for 1 liter.

The dynamics of wholesale prices for gasoline is now influenced by internal factors, including high seasonal demand and relatively low supply in the domestic market, confirms Sergey Kondratiev from the Institute of Energy and Finance. He notes that, according to Rosstatin March – early April, gasoline production at Russian refineries was at historical highs, exceeding 2021 levels by 8–9%, and now this excess is 2%.

Dmitry Kozlov