Gasoline started moving – Newspaper Kommersant No. 206 (7407) dated 11/08/2022

Exchange prices for gasoline in Russia, which fell to multi-year lows in October, began to recover slightly against the backdrop of rising oil prices. So far, the fall in stock prices has had almost no effect on the price of gas stations and increases the margin of gas station operators. Those, however, suffer losses when selling winter diesel fuel, the exchange prices for which have not yet seriously decreased.

The cost of AI-92 and AI-95 gasoline on November 7 rose on the stock exchange by 1.2% and 1%, to 35.3 thousand rubles. for 1 ton and 37.9 thousand rubles. per 1 ton, respectively. Fuel prices are on the rise again this week after falling to their lowest levels since at least 2018 last week. The cost of fuel resumed growth against the backdrop of rising prices for petroleum products in Europe due to higher oil prices.

Gasoline began to get cheaper in the spring, after foreign buyers began to refuse Russian fuel due to the outbreak of hostilities in Ukraine. As a result, a surplus of gasoline appeared on the Russian market, which pulled the cost of this fuel down. In addition, Russian oil companies tried to load their refineries to the maximum, receiving high damper payments, which also led to a surplus of supply in the domestic market.

Typically, the cost of gasoline in Russia decreases in the second half of autumn and winter, as the intensity of travel decreases. In addition, this year demand is negatively affected by a decrease in economic activity, the effect of partial mobilization and the departure of several hundred thousand economically active citizens abroad, said Sergei Kondratyev, deputy head of the economic department at the Institute of Energy and Finance.

Retail prices for gasoline are still almost not falling: according to data Rosstat on November 2, for the previous week, gasoline fell in price by only one penny.

According to “Petromarket”, the margin of gasoline sales at filling stations remains high and is estimated at 8.1–9.9 rubles. per litre.

However, diesel retailers continue to receive losses. The greatest losses are caused by the sale of frost-resistant grades of diesel fuel, since the wholesale cost of winter diesel fuel on the stock exchange is 67.3 thousand rubles. for 1 ton. The price of off-season diesel fuel increased on November 7 by 1.3%, to 54.4 thousand rubles. for 1 ton. Now the government and market participants are discussing how to stabilize prices in the face of insufficient production of winter diesel fuel by Russian refineries.

In October, prices for summer diesel fuel at SPIMEX fell to 53.5 thousand rubles. per 1 ton, being at the lowest levels since March 2022, Sergei Kondratiev notes. Now prices on the stock exchange have stabilized in the range of 54.5-55 thousand rubles. per 1 ton, however, the probability of a new price reduction, in his opinion, remains very high. The expert notes that diesel fuel exports have a high seasonality: usually in winter, up to 60-70% of all summer diesel fuel produced was exported (58% in October 2021), while only 35-40% is shipped to foreign markets in summer, as domestic demand increases .

Exchange prices for diesel fuel in winter will depend on what the export shipments will be.

So far, it is at a high level – according to Bloomberg, the export of Russian diesel fuel to the EU alone in October amounted to 2.14 million tons against 1.6 million tons in October 2021, Sergei Kondratiev notes. However, if the EU imposes sanctions on the import of Russian oil products from February 2023, the summer diesel fuel market may face overstocking, which will lead to a noticeable decrease in prices.

Dmitry Kozlov