The excess gasoline generated in Russia will return fuel to the export market

Officials lift restrictions on foreign supplies of petroleum products

The partial ban on the export of fuel from Russian plants, imposed by the state to stabilize domestic wholesale fuel prices, lasted only two months. Any day now, the government intends to lift all restrictions on the supply of petroleum products abroad. The reason for easing the export policy was the surplus of gasoline that appeared on domestic trading floors, which could not be sold. Experts believe that the government’s decision is not final: if stock prices go up again, then oil companies risk again losing access to the foreign market.

The ban on the export of petroleum products regarding diesel fuel introduced by the Russian government has already been partially lifted, but restrictions on the supply of AI-92 and AI-95 gasoline remain. The relevant officials are going to make the final decision after regular negotiations with mining companies and the presentation of the final report on the implementation of measures to stabilize fuel prices to the top leadership of the state. The complete lifting of the limits set on September 21 is tentatively scheduled for November 19.

The reason for the sequestration of oil industry exports was the record increase in wholesale fuel prices and the emergence of fuel shortages in various regions of our country. Domestic farmers, who immediately experienced problems with access to fuel, sounded the alarm and demanded that officials take urgent measures to streamline the situation.

In November, the situation stabilized: exchange prices fell by 25%, to the level of mid-spring, and after an increase in supplies to the domestic market in Russia, fuel storage tanks began to run out.

“According to the Ministry of Energy, during the period of restrictions, fuel reserves in our country increased by 430 thousand tons. According to bidders, there is no one to sell surplus raw materials within the country due to a seasonal drop in demand, notes BitRiver financial analyst Vladislav Antonov. — But there is another reason for refusing export quotas. The government is considering restoring fuel damper payments to oil refineries in full. “Circumstances are such that selling fuel on the domestic market is becoming more and more profitable for producers.”

The current stock market situation remains stable for both buyers and sellers of raw materials. In the wholesale segment, a ton of AI-92 gasoline is now, taking into account the promised payments for the damper, the full amount of which officials are going to return to oil refineries retroactively, starting in October, brings the owners of refineries 3 thousand rubles per ton more than with delivery abroad.

In turn, domestic prices per ton of diesel fuel (also taking into account government subsidies) are 6 thousand rubles higher than export prices. “However, restrictions will continue to apply, and the cost of petroleum products will continue to decline slightly,” warns Alexander Shneiderman, head of the sales and customer support department at Alfa-Forex.

However, market participants should not relax. Analysts believe that the drop in the domestic cost of fuel is ensured not only by restrictions on the export of fuel from Russia, but also by seasonal factors: the end of agricultural work combined with relatively warm autumn weather. If suppliers, after the lifting of the export moratorium, rush to foreign markets, the volume of which must be both maintained and constantly expanded, then after the onset of full-fledged frosts and, accordingly, an increase in domestic consumption of petroleum products, the cost of gasoline and diesel on our exchanges will go up again.

“The government’s priority is the domestic market. Discussion of the fuel issue will be constantly renewed at the level of the Ministry of Energy and the entire government, Antonov is sure. “True, in the next emergency, officials most likely will not go for a complete restriction of exports, so as not to irritate oil workers, but will try to achieve a balance, leaving companies the right to send part of the fuel produced abroad.”