Russian oil companies continue to reduce gasoline exports

According to Kommersant, Russian oil companies continue to reduce the export of high-octane gasoline, which fell by more than a quarter in a month and a half. In January last year, exporters shipped record volumes of gasoline, but this year, due to an accident at the Nizhny Novgorod refinery, some of the goods had to be redirected to the domestic market. Since the beginning of the year, gasoline shipments from domestic refineries have increased by 5%.

Oil companies have reduced gasoline exports by 27% since the beginning of the year compared to the same period in 2023, to 639 thousand tons, sources familiar with the figures told Kommersant. At the same time, over the 13 days of February, supplies abroad were almost 28% lower than a year ago (185 thousand tons). In January 2024, the average daily value of gasoline exports was 14.7 thousand tons compared to 20.1 thousand tons a year earlier, which was an absolute annual record.

Oil companies significantly increased gasoline exports last year, including market participants who recorded an increase in gray exports. We are talking about volumes intended for the domestic market, for which refineries receive budget payments for dampers. Last year the government increased from 20 thousand to 50 thousand rubles. per ton export duty for fuel resellers. In the event of a fuel shortage on the domestic market, the government may threaten a ban on fuel exports; such an embargo was already introduced last fall.

Gasoline shipments to the domestic market for 13 days of February turned out to be less than the level planned by the Ministry of Energy by 15%, about 1.32 million tons, and production – by 2.5% (1.52 million tons). At the same time, compared to last year, shipments increased by 5%, to 4.44 million tons.

Almost all oil companies in January, after an accident at a catalytic cracking unit at the Nizhny Novgorod refinery of LUKOIL, redirected volumes from export to the domestic market (see “Kommersant” dated February 5). Regulators insisted on this, while payment of the damper makes supplies to the domestic market economically acceptable for refineries.

Throughout January and early February, the wholesale cost of gasoline continuously increased against the backdrop of an accident at the Nizhny Novgorod refinery and increased drone attacks. However, in February, the steady rise in prices, which began in the wake of “panic” fuel purchases, stopped, and the cost of fuel adjusted downwards (see “Kommersant” dated February 14). On February 15, the decline in gasoline prices actually stopped. According to SPbMTSB, the exchange price of AI-95 in the European part of the Russian Federation decreased by 0.2%, to 52.6 thousand rubles. per ton. AI-92, on the contrary, rose in price by 1.1%, to almost 45.7 thousand rubles. per ton. Market participants characterize the current situation in the fuel market as “calm” against the backdrop of low demand.

But already in March, quotes are expected to go up again due to the start of repairs at large refineries and a simultaneous seasonal increase in demand for fuel.

In recent years, the growth in gasoline production in Russia has outpaced the growth in demand on the domestic market, says Alexandra Zubacheva from Petromarket. The increase in production was due to high-octane gasoline, which was the result of significant investments in the modernization of refineries. Providing the Russian market is a priority for producers, but, as a rule, with all the changes from month to month, fuel producers had excess volume that was exported, she argues. In December 2023, gasoline production in the Russian Federation for the first time exceeded 4 million tons per month, exports amounted to almost 750 thousand tons. According to the expert, in January exports could not be lower, since due to a decrease in demand during the New Year holidays, excess volumes of fuel appear. But in January, gasoline production decreased by 250 thousand tons compared to December, including due to an accident at the Nizhny Novgorod refinery, recalls Alexandra Zubachev, so oil companies had less volume to export.

Dmitry Kozlov