The authorities have limited fuel exports: analysts named possible negative consequences

A ban on the export of gasoline and diesel will only solve short-term problems

The acute situation in the domestic fuel market required radical measures from the government. The authorities introduced a temporary restriction on the export of gasoline and diesel from September 21, 2023, in order to meet the demand of their own consumers. In recent months, residents of the southern regions of Russia and a number of other regions have reported problems with the availability of gasoline and diesel. The cleaning company was under threat, as was discussed within the State Duma. But will the government measure help stabilize the domestic market? Will farmers be able to quickly obtain affordable diesel and how will fuel prices change in the near future? Experts told MK about this.

Igor Yushkov, leading analyst at the National Energy Security Fund, expert at the Financial University under the Government of the Russian Federation:

“At the first stage, a temporary ban on exports will lead to visible changes: the domestic market will quickly become saturated, and prices on the stock exchange will drop significantly. Another question is how long this measure will last. If the restriction lasts for a long time, there will be risks of fuel shortages on the domestic market. Until now, approximately half of the company’s diesel production was exported. Russia objectively does not need all the volumes produced: the country does not consume that much diesel. Now, after the introduction of export restrictions, all available volumes will be directed to the domestic market. It would seem great! But if the restriction lasts for a long time, it will be necessary to either shut down refineries or reconfigure their operation. It is unknown how long it will take to reconfigure. If companies shut down factories to redirect production to the domestic market, they will not produce anything. As a result, we will not get any gasoline or diesel – neither expensive nor cheap. But in the short term, everything will look good, and the tasks of related industries will be fulfilled: the domestic market will stabilize, farmers will carry out the necessary work on time (if the railway workers deliver fuel on time). In general, how justified this measure is is a big question.

Now from the point of view of state revenues. If we reduce exports, we end up with a shortage on the world market, causing prices to rise. As a result, we can make even greater profits. But again, the main question is the duration of the restriction.”

Fedor Sidorov, financial analyst, founder of the School of Practical Investment:

“By temporarily limiting fuel exports, the government will be able to quickly achieve a reduction in stock prices: it will be more expedient for oil producers to sell products on the domestic market, and it will quickly become oversaturated. Farmers will be able to satisfy their needs, and the harvesting company will not be in danger. All this is unlikely to be reflected in retail – fuel at gas stations will continue to slowly but surely rise in price. However, long-term negative consequences will then follow. Refineries will reduce refining volumes, which will affect the efficiency of the entire system. The result is a new rise in quotes. In addition, at the beginning of September, payments for dampers were halved, and the difference in price between the external and internal markets is about 20 thousand rubles per ton. So, although the measure will work in the short term, then it will be necessary to somehow resolve the issue of gray fuel exports. Well, a return to rising stock prices will inevitably happen within four to six months.”