Gasoline rises in price amid expectations of the embargo being lifted

Amid rumors about the imminent easing of restrictions on gasoline exports, its stock prices went up again. Thus, AI-92 and AI-95 rose in price by 2.5% and 1.4%, respectively. Expectations for lifting restrictions on fuel exports are based on the return of damper payments from October and the agreement on sources of compensation. Experts consider the lifting of restrictions inevitable: the domestic market has become premium, and the net margin of retail trade in gasoline and diesel is consistently positive.

The cost of AI-92 and AI-95 in the European part of the Russian Federation increased by 2.5% and 1.4%, to 49.4 thousand and 51.7 thousand rubles. per ton, respectively, according to data from SPbMTSB. This happened against the backdrop of reports about the possible imminent lifting of the embargo on the export of gasoline and diesel fuel, which was introduced September 21. The purpose of the embargo was to saturate the domestic market with fuel and reduce prices, which reached a new maximum in September. At the beginning of October the government weakened embargo, allowing the pipeline export of diesel fuel, otherwise the refinery would have been threatened with overstocking, and subsequently a decrease in refining.

For gasoline, export restrictions have not been lifted, but refineries expect them to be lifted next week, it reported Reuters November 9. The embargo was expected to remain in place until amendments were agreed to return to full damper payments.

When the cost of fuel falls for a long time, pent-up demand is formed, which worked against the backdrop of rumors about the imminent lifting of restrictions, says one of Kommersant’s interlocutors in the industry.

But this growth can hardly be sustainable, since world oil prices have fallen, the damper has been returned to oil workers in full, and therefore the domestic market has become attractive for supplies, he believes. The decision to lift the restrictions is overdue, Kommersant’s source believes, since without it, oil companies are unlikely to be able to significantly increase refining, including in order to meet the demand for winter diesel fuel.

Last week, the government agreed on sources of budget compensation for increasing damping payments, and this week the draft amendments were submitted to the State Duma. The return of the damper in full from October will be compensated by an increase in the mineral extraction tax on gas and gas condensate for Gazprom, as well as by reducing the amount of the reverse excise tax on oil for refineries in case of failure to meet the conditions for the supply of gasoline and diesel fuel to the domestic market (see “Kommersant” dated November 7).

The conditions for lifting the ban on the export of gasoline and diesel fuel developed back in October, when fuels were traded on the wholesale market at a premium relative to the prices of the export alternative, and the net margin of small wholesale and retail trade in gasoline and diesel became consistently positive, Petromarket notes.

In November the situation did not change for the worse and is absolutely stable. Thus, as of November 3, the national average prices on the wholesale market for AI-92 gasoline, taking into account payments for the “damper”, amounted to almost 3 thousand rubles. per ton exceed the value of the export alternative to refineries, which indicates the greater attractiveness of fuel supplies to the domestic market compared to exports.

According to Petromarket estimates, the same is true for the diesel fuel market: wholesale prices exceed the value of the export alternative by more than 6 thousand rubles. per ton. As for the national average net margin of small wholesale and retail trade in fuels, as of November 3 it is 8.5 thousand rubles. per ton AI-92 and 4.7 thousand rubles. per ton of diesel fuel.

“Now is a good time to lift restrictions on exports, since the cost of the export alternative has decreased due to falling world prices and the strengthening of the ruble, while supply has increased after the completion of repairs at refineries,” agrees Sergei Kondratyev from the Institute of Energy and Finance. But he believes that the government can act in the gasoline market by analogy with the diesel fuel market, lifting restrictions gradually, “allowing the export of AI-95, AI-98 and temporarily maintaining regulation of supplies for the most important for the domestic market, AI-92.”

Dmitry Kozlov